Ex­perts: Growth likely will be weak

Econ­omy

Austin American-Statesman - - BUSINESS - B

trial av­er­age was down 94 points at 13,151 in midafter­noon. The Stan­dard & Poor’s 500 in­dex was down 11 points at 1,417. The Nas­daq com­pos­ite in­dex was down 28 points at 2,985.

High un­em­ploy­ment and weak wage growth have kept con­sumers cau­tious about spend­ing, which ac­counts for 70 per­cent of eco­nomic growth. Most econ­o­mists ex­pect just slim gains in con­sumer spend­ing in the fi­nal three months of the year, which should keep growth weak.

“De­spite the pos­i­tive num­bers to­day … we are not in a con­sumerled re­cov­ery,” said Chris Christo­pher, an econ­o­mist at IHS Global In­sight.

A La­bor De­part­ment report sug­gested the job mar­ket is im­prov­ing, which could set the stage for more spend­ing next year.

Ap­pli­ca­tions for un­em­ploy­ment ben­e­fits, which are a proxy for lay­offs, fell by 29,000 last week to a sea­son­ally ad­justed 343,000. That’s the sec­ond-low­est to­tal this year.

The drop in­di­cates com­pa­nies are cut­ting fewer jobs and not yet pan­ick­ing about the “fis­cal cliff.” That’s the com­bi­na­tion of tax in­creases and spend­ing cuts set to take ef­fect next month if Pres­i­dent Barack Obama and Repub­li­can law­mak­ers fail to reach a bud­get deal be­fore then.

Con­sumers are also see­ing re­lief at the gas pump, which leaves them more dis­pos­able in­come. Gas prices have fallen al­most 50 cents over the

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