WASHINGTON – A flurry of reports Thursday showed that U.S. consumers are growing more confident and spending more, boosting a still-weak economy just five days before the presidential election.
Consumer confidence surged in October to its highest level in nearly five years. Americans were encouraged by recent declines in the unemployment rate, analysts said. Still, businesses remain nervous about where the economy is headed and that could weigh on hiring.
The October jobs report, which will be released today, is expected to show another month of tepid job growth.
Superstorm Sandy could also slow economic growth slightly in the final months of the year.
Thursdays reports showed:
The Conference Boards consumer confidence index rose to 72.2 last month. Thats the highest reading since February 2008. While the index is still below the 90 reading consistent with a healthy economy, it has risen from a reading of 40.9 a year ago. Thats the biggest one-year increase since 1994.
Sales in retail stores open at least one year rose 5 percent in October, according to a tally from 21 retail chains by the International Council of Shopping Centers. That was better than analysts expected.
Manufacturing expanded for the second straight month, largely because of higher consumer demand. The Institute for Supply Management, a private trade group, said its index of factory activity ticked up to 51.7 in October from 51.5. A reading above 50 indicates expansion. Factory activity is growing again after contracting from June through August.
Weekly unemployment applications fell 9,000 to 363,000 last week. That suggests hiring is unlikely to pick up much from its current pace of about 150,000 new jobs a month.
A report by payroll provider ADP showed that businesses added 158,000 jobs last month, up from 114,000 a month before.
Auto sales also rose in October, even though the storm caused dealers on the East Coast to lose three days of business.
Construction spending rose 0.6 percent in September, the Commerce Department said. A healthy gain in spending on home construction and renovation outpaced declines in commercial and government building.