The Labor Department reported that newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecasted. The report also said, though, that many employers remain reluctant to hire.The report fanned optimism that the government's monthly report on employment Friday might prove better than expected. Analysts project that the unemployment rate rose to 9.9 percent in October. If the actual unemployment rate comes in under 9.9, the markets are likely to cheer.
Also, the biggest increase in productivity in six years may mean that lower costs will boost corporate profits. The government said the amount of output per hour worked rose 9.5 percent in the third quarter of 2009.
In addition, retailers reported sales increases for the second straight month in October after more than a year of declining sales. Per an International Council of Shopping Centers-Goldman Sachs report, the retail industry posted a 2.1 percent sales gain for October. This may help satiate investors appetite for any sign that consumers might spend more as the holiday shopping season.
The news has been better than expected. However, recent mixed economic data has made it difficult for investors to get a sense of where the economy is headed. The market has moved up sharply at the positive results, but investors are concerned that the economy won't be able to sustain the 3.5 percent pace of growth seen in the third quarter as government stimulus programs end.
Reports due tomorrow, 11/6/09:
Change in Nonfarm Payrolls
Unemployment Rate
Change in Manufacturing. Payrolls
Average Hourly Earnings - Month over month
Average Hourly Earnings - Year over year
Average Weekly Hours
Wholesale Inventories
Consumer Credit
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