Some More (Slightly) Upbeat Macroeconomic News: Income, Spending And Consumer Sentiment Rise

As we headed off to the Thanksgiving holiday weekend last week, the U.S. Departments of Commerce and Labor, and Thomson Reuters/The University of Michigan Surveys of Consumers gave us some new data for which to be thankful.

Personal income in the U.S. grew half a percentage point in October, unadjusted for inflation, following a flat reading in September. Personal consumption expenditures also rose, up 0.4% in October, after rising 0.3% in September.

The Labor Department reported jobless claims fell for the week ended Nov. 20 to 407,000. It was the lowest number of new jobless claims since July 2008.

The University of Michigan final November reading of consumer sentiment in November rose to 71.6 from 67.7 in October and stood 6.2% higher than November ’09. It was the highest reading since June. Combined with recent positive retail sales, the numbers cheered up traders on Wall St. last Wednesday.

Still, it is important to bear in mind the U.S. economic recovery remains weak and will likely remain so for at least the next year. With unemployment still at 9.6%, many households continue to struggle. According to the release accompanying the latest Surveys of Consumers data, “nearly twice as many consumers reported that their finances had worsened rather than improved” during the past year. And the research group’s Index of Consumer Expectations, while rising in November, stood 2.6% below the November ’09 reading.

But up is better than down, even if moderately so.