Economic news from the week

It certainly has been a week of strong economic news. In true Letterman style, consider the following top 10:

1. Economic activity in the manufacturing sector expanded in October for the 15th consecutive month, and the overall economy grew for the 18th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.
2. The BEA reported that real personal consumption expenditures reached $9.349 billion in September, the highest level of U.S. consumer spending since the recession started in December 2007, 33 months ago.  On a year-over-year basis, September’s 2.3% increase in consumer spending was the largest percentage increase in three years, since September of 2007.
3. The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.3 in September, up a solid 0.8 percent from its August level (see chart above). In addition, the RPI rose above 100 for the first time in five months, which signifies expansion in the index of key industry indicators.
4. Based on average real GDP growth (subject to revisions of third quarter GDP) for the five quarters following recession, this expansion is stronger than the 2002 expansion by almost a full percentage point (2.81% vs. 1.87%), and just slightly below the 1991-1992 period (2.96%).
5. The BEA reported that real GDP grew at 2.0% in the third quarter, boosted by a 2.6% rise in inflation-adjusted consumer spending, the highest quarterly increase since the 4.1% growth in the fourth quarter of 2006, 15 quarters ago.  This healthy growth in consumer spending from July through September is consistent with:  a) the many states that have been reporting increases in tax revenues in the third quarter from sales, individual income and corporate income taxes, and b) the stronger-than-expected retail sales report for September (7.2% annual growth).
6. Rail traffic continued on an upward trend for the week that ended last Saturday, with both carloads and intermodal traffic registering solid gains versus the same week last year of 9.6% and 13.6% respectively.
7. The BEA reported today that real GDP grew at 2.0% in the third quarter, boosted by a 2.6% rise in inflation-adjusted consumer spending, the highest quarterly increase since the 4.1% growth in the fourth quarter of 2006, 15 quarters ago.  This healthy growth in consumer spending from July through September is consistent with:  a) the many states that have been reporting increases in tax revenues in the third quarter from sales, individual income and corporate income taxes, and b) the stronger-than-expected retail sales report for September (7.2% annual growth).
8. Except for the holiday-related July 10 low, last week’s 434,000 seasonally-adjusted weekly claims for unemployment insurance was the lowest since the week of August 23, 2008, more than two years ago.
9. New orders for durable manufactured goods in September reached the highest level ($199.1 billion) since September 2008, two years ago (see top chart above). The 12.2% increase in durable goods orders in September compared to the same month last year was the ninth consecutive double-digit increase starting in January of this year.
10. The International Air Transport Association (IATA) released international traffic results for September today, reported that international passenger traffic had a 10.5% year-on-year increase which is significantly stronger than the 6.5% rise recorded for August.

Hmmm. Good week considering we are still not performing at our potential. That’s going to take a bit longer I’m afraid.