11:10 AM New York – Weak manufacturing report sent another alert to investors that the pace of U.S. economic recovery is likely to be weak. Manufacturing activity expanded but at a slower pace in September. Construction spending increased in August and weekly jobless claims advanced.
Stocks in early trading in New York declined after the release of manufacturing report. The private report indicated that the measure of manufacturing activities in September decreased to 52.6 from 52.9 August when most economists were looking the index to inch higher. The index is prepared and tracked by the Institute for Supply Management.
The various sub indexes showed an increase but at a slower pace indicating that the economy may in the process of recovery but the pace of rebound will be uneven.
The index of export orders fell to 55 from 55.5 and the employment index decreased 46.2 to from 46.4.
The recent rise in manufacturing has been supported by the cash-for-clunker program that acted as a catalyst to sell 700,000 vehicles.
Construction Spending Soft
Other government reports indicated mixed signals. Construction spending increased 0.8% in August from July but fell 11.6% from a year ago.
Private construction spending increased 1.8% to a seasonally adjusted rate of $622.1 billion of which residential construction gained 4.7% to $249.5 billion
Public spending decreased 1.1% to $319.8 billion and education spending was unchanged at $89.2 billion and highway construction spending edged up 0.8% to $85.2 billion.
Personal Income Rises in August
August personal income increased 0.2% and matching the July rate and disposable income increased 0.1% to after falling at a rate o 0.2%. Personal consumption expenditure increased 1.3%.
Real disposable income decreased 0.2% in August, compared with a decrease of 0.1% in July. Real PCE increased 0.9%, compared with an increase of 0.2%.
Weekly Jobless Claims on the Rise
The seasonally adjusted initial claims in the week ending Sept 26 increased 17,000 to 551,000 from the revised 534,000 in the previous week.
The preliminary read on the unemployment in the last week showed 4.6% rate matching the rate in the previous week. The number of people claiming jobless benefits decreased 70,000 to 6.09 million from the prior week and 4-week moving average decreased 39,250 to 6.15 million.
The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.665 million.