American spendholics ~~ re: Jobless Claims Jump, but Consumer Spending Up
With the international funds trading US markets which are easier to make huge money than gambling with colluded trading, it is obvious that funds are moving from one sector to another. Large funds can move the markets such as moving money from commodity to stocks, etc.
This implies that US financial markets are like a big easy money making entity at the expense of big 401k holders and sheepster traders.
With huge trade deficit and weak job markets, there is nothing so bullish, market actions like yesterday setting up disaster melt-down.
Personal spending up: must be spending tax rebates even before they receive it.
Markets already priced in the tax rebate spending.
American spendholics still loves materialism while US is sold off in pieces and now with huge debt.
"Just make money" mentality made Americans robed and debted.
~~~
Jobless Claims Jump, but Consumer Spending Up
By Reuters
Reuters
| 01 May 2008 | 07:43 AM ET
The number of U.S. workers applying for jobless benefits surged last week in gloomy news for the labor market, but personal spending in March was stronger than expected, government data on Thursday showed.
Initial claims rose by 35,000 and the number of workers remaining on jobless benefits climbed to a four-year high, the Labor Department said, helping prices in the bond market as investor bet on another rate cut by the Federal Reserve.
"After seeing an improvement trend much of April, the sudden deterioration at the end of the month is certainly disappointing," said Richard DeKaser, chief economist at National City in Cleveland, Ohio.
A housing crisis has chilled U.S. growth and seen the Federal Reserve slash interest rates aggressively, with the central bank delivering another 25 basis point rate cut on Wednesday to 2 percent.
Initial claims for jobless benefits increased to a seasonally adjusted 380,000 in the week ended April 26, from a revised 345,000 the previous week. Analysts polled by Reuters had expected claims to rise to 360,000 from an initially reported 342,000.
The four-week moving average of new claims, a more reliable guide to underlying labor trends that irons out weekly fluctuations, fell last week to 363,750 from 370,250.
But the number of workers remaining on jobless benefits jumped to a bigger-than-expected 3.019 million in the week ended April 19. That was the highest level since April 2004.
Analysts were expecting continuing claims to rise to 2.95 million.
"The report certainly does indicate the job market is weaker, though that is not much of a surprise. There have been mass layoffs, especially on Wall Street," said Andrew Richman at Suntrust's personal asset management unit.
Adding to the gloomy jobs picture, a report from the Chicago-based Challenger Gray and Christmas showed a 19-month high in the number of planned job cuts during April and a 68 percent rise from March.
"This is the biggest job-cut month we have seen since the onset of the housing collapse," said John Challenger, who heads the job outplacement tracking firm.
SPENDING UP
A separate release from the Commerce Department showed that U.S. personal spending rose by 0.4 percent in March, twice as much as forecast, while a key inflation measure was up by a bit more than expected.
Economists polled by Reuters had forecast personal spending to rise 0.2 percent compared with 0.1 percent gain the previous month as the U.S. housing crisis chilled economic activity and pinched consumers.
The Commerce Department said that personal income was up 0.3 percent in March, slightly under forecasts for a 0.4 percent rise and after a 0.5 percent February gain.
But adjusted for inflation, income stagnated after increasing by 0.3 percent in February.
"This tells us we are ending the quarter on a relatively up note. This portends we could see better consumption pattern in the second quarter," said DeKaser.
The overall personal consumption expenditures price index, which measures the price pressures faced by consumers, rose 0.3 percent in March from a 0.1 percent increase the month before.
Excluding volatile food and energy prices, the core PCE price index, which is the Federal Reserve's preferred measure of inflation, was up 0.2 percent versus forecast for a 0.1 percent rise. That followed a 0.1 percent gain in February.