Friday Economic Snapshot: Economy continuing expansion at moderate pace
We’ve now entered corporate quarterly earnings season, which is a great thing because it means we’re talking about business, rather than political upheaval. With the removal of the Washington uncertainty, the bull market has resumed its climb and economists are likely sleeping much easier.
This week we’ve got some generally positive economic news that suggests our slow-but-sure recovery will remain back on track as long as politicians keep their hands off the steering wheel.
Chicago Business Barometer
From the Institute for Supply Management comes the Chicago Business Barometer, a less known indicator that measures Chicagoland’s new orders, production and order backlogs in the manufacturing sector.
This month’s barometer rose to 65.9, up from 55.7 in September. It’s the highest level since March 2011, and assuages concerns that the government shutdown would lead to a significant slowdown in private sector investment. It’s risen for four consecutive months and, even though it focuses on one metro area, it’s an interesting indicator worth keeping tabs on for our country’s third-largest city.
The latest data from the Department of Labor shows weekly unemployment claims declining slightly to 340,000, which is a drop of 10,000 from last week’s figure. Recent trends have edged up the four-week moving average to 356,250.
Zooming out and looking at the trend line for the last year, our unemployment claims have ticked up for the last few weeks. Hopefully this is a momentary blip, as the entire economy needs unemployment to stay as low as possible.
A big statement from the Federal Open Market Committee this week suggests, “economic activity has continued to expand at a moderate pace.” Major indicators continue to gradually improve, and data suggests household spending and business investment both improved.
In line with its mandate for the Committee to foster maximum employment and price stability, its report said that fiscal policy is currently restraining growth and suggests that the government’s asset purchases should continue into the foreseeable future. This sentiment should bolster investment in the American economy going forward.