Weekly Economic Update for October 3, 2011

“Lots of people want to ride with you in the limo, but what you want is someone who will take the bus with you when the limo breaks down.”
– Oprah Winfrey 

In August, personal spending improved by 0.2% while personal incomes retreated by 0.1%. This was the first monthly decline in household incomes since October 2009; July’s household earnings gain was revised down to 0.1%.1

September’s final University of Michigan consumer sentiment survey came in at 59.4, much better than the final August mark of 55.7 and topping the consensus forecast of 57.8 from economists surveyed by Bloomberg News. The Conference Board’s consumer confidence index ticked up 0.2% to 45.4 this month.1

The Commerce Department said overall hard goods orders declined 0.1% in August, but a closer look revealed some positives. Core capital goods orders (excluding the aircraft and transportation sectors) improved by 1.1% and core capital goods shipments were up by 2.8%.2

New home sales slipped 2.3% in August but showed a 6.1% annual gain, according to the Census Bureau. The same trend held true for pending home sales: the National Association of Realtors said they were down 1.2% for August but up 7.7% from a year before. The Standard & Poor’s/Case-Shiller home price index rose 0.9% in July with prices 4.1% underneath July 2010 levels.3,4,5

September saw major losses for the Dow (-6.03%), NASDAQ (-6.36%) and S&P 500 (-7.18%). Last week’s numbers showed the blue chips rising: DJIA, +1.32% for the week to settle Friday at 10,913.38; NASDAQ, -2.73% last week to 2,415.40; S&P 500, -0.44% last week to 1,131.42.6

With the holidays just ahead, consider automatic paycheck deductions into an online savings account. These accounts may reap a tidy dividend, and you could have a well of cash to draw from as you shop for gifts.

A rain gauge collects rainfall each day of a wet week beginning on Monday. Every day, the amount of rain in the gauge doubles. At Sunday’s end, the rain gauge is completely filled. So on which day is it half-filled?

Last week’s riddle:
I can’t be seen, but I’m all around. I have no mouth, yet can make a sound. I can be harnessed, but never bound. No hands have I, yet I move the ground. What am I?

Last week’s answer: Wind.

1 – businessweek.com/news/2011-09-30/consumer-sentiment-in-u-s-increases-more-than-forecast.html [9/30/11]
2 – marketwatch.com/story/us-durable-goods-orders-drop-01-in-august-2011-09-28?reflink=MW_news_stmp [9/28/11]
3 – census.gov/const/newressales.pdf [9/26/11]
4 – realtor.org/press_room/news_releases/2011/09/phs_august [9/29/11]
5 – articles.latimes.com/2011/sep/28/business/la-fi-home-prices-20110928 [9/28/11]
6 – cnbc.com/id/44729786 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F30%2F10&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F30F2%2F10&x=10&y=18 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F30%2F10&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F29%2F06&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F29%2F06&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F29%2F06&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F1%2F01&x=0&y=0 [9/30/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/30/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/30/11]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
10 – montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [9/30/11]

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