US jobless claims andconsumer spending rise

Bloomberg

Initial jobless claims increased more than forecast to 586,000, the most since November 1982, from a revised 556,000 the prior week, the Labor Department said yesterday in Washington. Employers including automakers accelerated firings in the final months of 2008, and job losses for the year are forecast to exceed 2 million. The deteriorating labor market prompted President-elect Barack Obama this week to expand his economic stimulus goals and call for creating or saving 3 million jobs over the next two years.

Meanwhile, U.S. consumer spending adjusted for inflationrose in November by the most in almost two years, a sign that falling gasoline prices are giving Americans more cash to spend for the holidays.

The 0.6 percent gain in purchases adjusted for prices was the first increase in six months and the biggest gain since December 2006, the Commerce Department said yesterday.

The data confirms inflation is retreating as demand wanes.

The average price of unleaded regular gasoline at the pump fell by $1 to $2.11 in November from the prior month. The decrease in nominal spending pushed the savings rate up to 2.8 percent from 2.4 percent in October. A positive rate suggests consumers are restraining spending to boost savings. Disposable income, or the money left over after taxes, increased 1 percent after adjusting for inflation. It was the biggest gain since May.

Orders for U.S. durable goods also fell less than forecast in November, easing concern that business investment would plummet in coming months in response to the deepening credit freeze and slowing sales.Bookings for goods meant to last several years fell 1 percent, after a 8.4 percent drop in October that was more than previously estimated and the biggest decline in eight years, the Commerce Department said.