Economic Update 02/04/13

MORE HIRING … AND YET, MORE UNEMPLOYMENT

In January, the jobless rate ticked up to 7.9%. The Labor Department countered that with some good news: 127,000 more workers were hired across November and December than previously thought. Last month, 157,000 new jobs were created.

EXAMINING CONSUMER BAROMETERS

According to the Commerce Department, personal spending rose 0.2% in December while personal incomes rose 2.6% (thanks in part to dividends being issued ahead of the fiscal cliff). The savings rate hit 6.5%, a 43-month high; after-tax incomes improved 2.8%. Elsewhere, while the Conference Board’s January consumer confidence survey plunged 8.1 points to a 14-month low of 58.6, the University of Michigan’s final January consumer sentiment poll improved 0.9 points to 73.8.

GDP WANES; HOME PRICES, MANUFACTURING PERK UP

The economy contracted 0.1% in the past quarter, according to the initial estimate of the Bureau of Labor Statistics. Analysts termed it an anomaly, with reduced defense spending a big factor. The Institute for Supply Management’s January PMI showed an impressive gain of 2.9% to 53.1. November’s Case-Shiller Home Price Index revealed an overall 5.5% year-over-year improvement; the National Association of Realtors reported a 4.3% decline in pending home sales in December.

DOW ENDS WEEK AT 14,009.79

Friday’s close was within 200 points of the index’s 2007 peak. The Dow gained 0.82% last week, while the NASDAQ advanced 0.93% (to 3,179.10) and the S&P 500 gained 0.68% (to 1,513.17).

THIS WEEK: Monday, data on December factory orders arrives plus earnings reports from Anadarko, Hartford Financial, Clorox, Gannett, Humana, and Yum! Brands. Tuesday brings January’s ISM service sector PMI and earnings results from Aflac, Allergan, Expedia, Kellogg, Panera, Sirius XM, Estee Lauder, Toyota, Chipotle, Walt Disney and Zynga. Wednesday offers earnings fromTime Warner, Akamai, Allstate, Cummins, CVS, Fifth Street, Green Mountain, Ralph Lauren, Marathon Oil, News Corp., Prudential Financial, Tesoro, Visa, GlaxoSmithKline and Yelp. Thursday brings the latest initial claims figures and results from Cigna, Coca-Cola, Coinstar, Monster, Hasbro, Activision Blizzard, LinkedIn, Philip Morris, Scripps Networks and Sprint Nextel. Friday, AOL announces Q4 results.