Job mar­ket has made grad­ual progress

Econ­omy

Austin American-Statesman - - BUSINESS - Con­tin­ued from B

comes at a crit­i­cal time when the econ­omy is show­ing signs of im­prove­ment else­where.

A re­cov­ery in the hous­ing mar­ket is look­ing more sus­tain­able. On Thurs­day, the government said new-home sales in­creased in Novem­ber at the fastest sea­son­ally ad­justed an­nual pace in 2½ years.

And the job mar­ket has made slow but steady gains in re­cent months. The av­er­age num­ber of Amer­i­cans ap­ply­ing for un­em­ploy­ment ben­e­fits over the past month fell to the low­est level since March 2008.

But the po­lit­i­cal wran­gling in Washington threat­ens the econ­omy’s slow, steady progress.

Pres­i­dent Barack Obama and House re­turned to Washington Thurs­day to re­sume talks with just days to go be­fore the dead­line.

But Se­nate Ma­jor­ity Leader Harry Reid warned that the government ap­pears to be headed over the fis­cal cliff be­cause talks had stalled. The Ne­vada Demo­crat made the com­ments min­utes af­ter the con­sumer con­fi­dence report was re­leased.

The com­bi­na­tion of weaker con­sumer con­fi­dence and dim­ming hopes of a deal on the “fis­cal cliff” hit fi­nan­cial mar­kets hard Thurs­day.

The Dow Jones in­dus­trial av­er­age dropped 132 points in early-af­ter­noon trad­ing. Broader in­dexes also de­clined.

A short fall over the cliff won’t push the econ­omy into re­ces­sion. But most econ­o­mists ex­pect some tax in­creases to take ef­fect next year. That could slow eco­nomic growth.

While con­sumers are more wor­ried about where the econ­omy is headed, they were up­beat about present con­di­tions, ac­cord­ing to the lat­est sur­vey. Their as­sess­ment of cur­rent eco­nomic con­di­tions rose this month to the high­est level since Au­gust 2008. A key rea­son is that gas prices hit a 2012 low of $3.21 a gal­lon last week. Nor­mally, that would prompt con­sumers to spend more on hol­i­day shop­ping.

But the op­po­site has hap­pened. A report from MasterCard Ad­vi­sors Spend­ing pulse in­di­cated sales grew in the two months be­fore Christ­mas at the weak­est rate since 2008, when the coun­try was in a deep re­ces­sion.

There were other dis­trac­tions this hol­i­day sea­son. In late Oc­to­ber, Su­per­storm Sandy bat­tered the North­east and mid-At­lantic states, which ac­count for 24 per­cent of U.S. re­tail sales. That cou­pled with the pres­i­den­tial elec­tion, hurt sales dur­ing the first half of Novem­ber.

Shop­ping picked up in the sec­ond half of Novem­ber. But “fis­cal cliff” wor­ries damp­ened sales in De­cem­ber.

The Na­tional Re­tail Fed­er­a­tion, the na­tion’s largest re­tail trade group, re­mains op­ti­mistic sales won’t be quite as bad as ear­lier re­ports have sug­gested. It is stick­ing to its forecast for to­tal sales for Novem­ber and De­cem­ber to be up 4.1 per­cent to $586.1 bil­lion this year.

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