Economy at a Glance :: Federal Reserve Bank of Cleveland

Economy at a Glance

Executive Summary

Data published in the last month indicate that the economy is continuing to expand, at a better pace in the third quarter than in the first half of the year. While a recession remains a risk, the most recent readings on a range of indicators suggest the chances have receded at least a little.

 …  Executive Summary

Data published in the last month indicate that the economy is continuing to expand, at a better pace in the third quarter than in the first half of the year. While a recession remains a risk, the most recent readings on a range of indicators suggest the chances have receded at least a little.

The most recent news on nonfarm payrolls show the job market still improving at a slow rate. The economy added 103,000 jobs in September. While the total for September was artificially boosted by the return to work of striking telecommunications workers, revisions to preliminary estimates boosted job gains in July and August by nearly 100,000. With the revisions, employment expanded at an average of 96,000 jobs per month in the third quarter. The unemployment rate held steady at 9.1 percent in September, while the employment-to-population ratio edged up 0.1 percentage point, to 58.3 percent.

Several other indicators suggest a slightly improved pace of recovery. The ISM's Purchasing Managers Index (PMI) for manufacturing showed a small pickup in September, rising 1.0 index points to 51.6. The level of the ISM index is consistent with continued growth in the manufacturing sector. Construction spending rose 1.4 percent in August, pulling the 12-month average growth rate into positive territory for the first time since 2007. Finally, auto sales picked up significantly in September, to a pace not seen since April.

With oil and gasoline prices easing, headline measures of consumer price inflation slowed somewhat, while core measures remained consistent with an underlying inflation trend of 2 percent or less. In August, the Personal Consumption Expenditures (PCE) price index rose at an annualized rate of 3.0 percent, down from 4.5 percent in July. Over the 12 months ending in August, PCE inflation averaged 2.9 percent. Underlying inflation as measured by the core PCE price index came in at 1.8 percent in August, putting the 12-month average rate at 1.6 percent.

  [2011-10-10]  Executive Summary

Regional Economics