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  • Writer's pictureAIM Team

NAM: Economy’s strength may signal end to fed’s easing

The AP (9/6, Rugaber) reports that the economy is “showing strength” as autumn approaches, a “trend that’s raising the likelihood” that the Fed will begin to end its bond-buying program later this month. The “steady improvement” is “lifting hopes” that the August jobs data will be strong when released by the Department of Labor on Friday.

Meanwhile, the Wall Street Journal (9/6, Curran) reports Federal Reserve Bank of Dallas President Richard Fisher, speaking on Thursday, indicated that the Fed had not yet finalized its plans to ease back on bond purchases. However, he said that the Fed has begun to lay the ground work for such a move by letting the public know that it won’t go on forever.

Jobless Claims Near Six-Year Low. Bloomberg News (9/6, Chandra) reports that new Labor Department data shows that jobless claims fell 9,000 for the week ending August 31 to 323,000, just above the 6-year low of 322,000 hit three weeks earlier. Bloomberg says that data shows that employers are “holding the line on dismissals,” which in turn is “setting the stage for a pickup in hiring to meet any acceleration in demand as the effects of federal budget cuts and higher payroll taxes begin to wane.”

ADP Report Shows 176,000 Private-Sector Jobs Added In August. The Wall Street Journal (9/6, Madigan, Portlock, Subscription Publication) reports that the monthly ADP/Moody’s Analytics private sector employment report released Thursdayshowed a gain of 176,000 jobs added in August. The ADP report showed an increase of 165,000 service sector jobs, but only 5,000 factor jobs.

Service Sector Activity Expanded. Reuters (9/6, Lange, Lopez) reports that the Institute for Supply Management announced on Thursday that its non-manufacturing index rose to 58.6 in August from 56.0 in July, indicating that activity in the sector is accelerating.

US Factory Orders Fell 2.4 Percent. Bloomberg News (9/6, Chandra) reports that the Commerce Department reported that US factory orders “fell less than forecast in July” at 2.4 percent, less than the 3.4 percent decline anticipated in a Bloomberg survey of economists. Meanwhile, orders for durable goods fell 7.4 percent in July, though the Institute for Supply Management’s “factory index rose to 55.7 in August, the highest level since June 2011.”

August Retail Sales Below Expectations. The Wall Street Journal (9/6, Prior, Subscription Publication) reports that August retail sales are not living up to analysts’ expectations. In particular, apparel retailer numbers are not great, though consumer purchasing of bigger-ticket items is increasing.

Consumer Confidence Continues To Decline. Bloomberg News (9/5, Jamrisko) reports that its Consumer Comfort Index fell for a fourth consecutive week “to its lowest level since early April as Americans’ views on the economy and buying climate deteriorated.” The index now sits at minus 32.3, down from minus 31.7 the prior week.

Economists Expect Positive Canadian Employment Report. Bloomberg News (9/6, Altstedter) reports that Canada’s dollar was up against most other currencies, though down slightly (0.1 percent) against the US dollar, in anticipation of reports that its “economy may be emerging from a mid-year slowdown.” Bloomberg’s survey of economists projects a report of 20,000 jobs created in August, maintaining the unemployment rate at 7.2 percent.

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