Daily Market Commentary for October 28, 2011
Commerce Department reported wages of U.S. workers rose slightly during the month of September, but Americans spent money at a more rapid pace and dipped into their savings to pay for their purchases or taking on more debt. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
The Labor Department reported compensation costs for civilian workers edged up a seasonally adjusted 0.3% in Q3 to take the year-on-year rate to 2%, with wages and salaries rising 0.3% while benefits rose 0.1%.
Consumer sentiment rose to the highest reading since July, during the month of October. The final sentiment reading for October reached 60.9, compared to a preliminary October reading of 57.5 and a September level of 59.4. Consumers remain concerned about their personal finances and with “widespread distrust” of Washington their gloom is likely to remain, according to Richard Curtin, chief economist for the consumer survey. “The upcoming debates about spending cuts and tax hikes surrounding the budget resolution will increase uncertainty and cause consumers to become even more prudent spenders,” Curtin said in a statement. “Although a renewed downturn in the economy has a 50-50 chance of starting around the start of 2012, it is even more likely that growth will not be robust enough to restore consumer optimism about their job and income prospects.” Consumer sentiment reading covers how consumers view their personal finances as well as business and buying conditions and averaged about 87 in the year before the start of the most recent recession. Consumer spending makes up the largest portion of the economy and economists watch confidence readings to get a feel for the direction of spending. The Michigan consumer-expectations index rose to 51.8 during the month of October from 49.4 in September. The Conference Board’s gauge is more sensitive to the labor market, while the Michigan reading is more sensitive to financial markets. Current-conditions index increased to 75.1 from 74.9 while one-year inflation expectations ticked lower to 3.2% from 3.3%.
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