Consumer confidence rose to a four-year high and manufacturing expanded more than forecast, all contributing factors to greater resilience in the US economy.
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JPMorgan Chase’s chief US economist noted that the economy is beginning to stabilize, easing concerns of only two or three months ago that the recovery was losing steam.
Stocks rose on the more stabilized outlook and also that the US economy seems to be weathering the prospect that $607 billion in federal cuts and tax increases known as the fiscal cliff will kick in at the beginning of the year.
Manufacturing output also increased in China for the first time in three months, adding to the sense that the global economy is gaining better footing.
The economy may be slowed a bit by the aftereffects of Hurricane Sandy. Auto sales in October trailed analysts’ estimates.
The Labor Department unemployment report to be announced Friday morning November 2 is expected to show an increase in total payrolls of 125,000 in October on top of a 114,000 increase in September. But the unemployment rate rose to 7.9% from 7.8%.
On the European front, the debt crisis caused five European countries to go into recession
, causing confidence in the region to fall in October.