NAM: Monday Economic Report
Total new business applications soared from 883,018 in the second quarter to 1,566,373 in the third quarter. This suggests that the number of employer business formations jumped sharply, with Americans likely pursuing entrepreneurial ventures as a means of supplementing their income, especially in a challenging economy and labor market.
Manufacturing production declined 0.3% in September. This suggests that production slowed after progress over the past four months following the 20.1% decline in manufacturing production experienced between February and April due to the COVID-19 pandemic. Despite progress in recent months, output remained 6.4% below the pre-pandemic pace in February.
Manufacturing capacity utilization edged down from 70.7% in August to 70.5% in September. For comparison purposes, it registered 75.2% in February.
Manufacturing activity expanded once again in the New York and Philadelphia Federal Reserve Bank districts, with stronger growth for new orders and shipments in both regions. Respondents felt upbeat in their outlook for the next six months.
Consumer spending at retailers rose 1.9% in September, up from the 0.6% gain in August and the best monthly increase in three months. More importantly, retail sales have now risen for five straight months following historic declines in the spring due to COVID-19-related retail closures. Over the past 12 months, retail sales have risen 5.4%.
Consumer confidence rose to the highest point since March, according to preliminary data from the University of Michigan and Thomson Reuters. Americans felt more upbeat in their outlook for the future, but their assessment of current conditions slipped somewhat. Despite progress in recent months, sentiment remains well below the levels before the COVID-19 outbreak.
The Small Business Optimism Index increased to the highest reading since February, as small business owners have become more upbeat in their assessments of the economy. Hiring and capital spending plans both improved, with respondents once again citing difficulties in obtaining enough labor as the top “single most important problem.”
Initial unemployment claims totaled 898,000 for the week ending Oct. 10, up from 845,000 for the week ending Oct. 3, rising for the first time in three weeks. Meanwhile, continuing claims declined from 11,183,000 for the week ending Sept. 26 to 10,018,000 for the week ending Oct. 3, consistent with 6.8% of the workforce.
Consumer and producer prices both increased in September, but core inflation remains largely in check for now. Excluding food and energy, consumer prices have risen 1.7% over the past 12 months, and core producer prices have risen 0.7% year-over-year.