"Confidence among upper-income households has definitely been bolstered by the appreciation in equity markets. The risk to sentiment going forward may be the recent rebound in gasoline prices that would shake the wherewithal of poorer Americans especially."
- Joseph Brusuelas, a senior economist for Bloomberg LP
Ahead of December's FOMC meeting, where policymakers could start tapering its stimulus programme, all economic indicators are having bigger effect as usual, as they can play a decisive role for the U.S. central bank. While jobless claims fell more than predicted and consumer sentiment was stronger-than-expected, demand for long-lasting goods weakened significantly.
Amid positive news, the University of Michigan said Americans feel a bit brighter about the current and future state of domestic economy ahead of the Thanksgiving, with corresponding index rising to 75.1 from 72.0 a month earlier, and beating analysts' expectations for a 73.1 reading. At the same time, the labour market is definitely on the mend, as the number of initial jobless claims in the week ended November 22 fell by 10,000 to 316,000. The less volatile, four-week moving average slipped 7,500 to 331,750. While the labour market is brightening, manufacturing sector is losing momentum, with business spending on capital goods falling significantly and the number of orders for long-lasting goods decreasing 2% from September. Core durable goods, which exclude the volatile transportation category, inched lower 0.1%, marking the third straight month of declines.
The data mean that even though companies are no longer laying off workers, they are not showing willingness to increase spending.
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