WASHINGTON — Key private indexes of manufacturing and consumer confidence edged up in October, and the government Thursday reported an increase in construction spending in September and a drop in weekly unemployment claims.
The flurry of reports added to evidence that consumers are growing more confident and spending more, giving a boost to a still-weak economy, analysts said.
Businesses remain nervous about where the economy is headed, and that could weigh on hiring. The October jobs report, to be released today, is expected to show another month of tepid job growth. The report is expected to show that the national unemployment rate rose to 7.9percent in October from 7.8 percent in September.
Unemployment-benefits “claims have been on a mildly improving trajectory,” said Gennadiy Goldberg, a U.S. strategist at TD Securities Inc. in New York. “We’re definitely getting fewer firings, but hirings are picking up very gradually, and that’s why you’re only seeing gradual improvement in the labor market.”
The stock market seemed to welcome the signs of improved economic health. The Dow Jones industrial average jumped 136.16 points to 13,232.62, the best day on the Dow since mid-September.
“While short of any glowing upside surprises ... U.S. economic data are at least all moving in the right direction,” Robert Kavcic, an economist at BMO Capital Markets, said in a note to clients.
Weekly unemployment applications fell 9,000 to 363,000last week, an indication demand is strong enough to maintain current staff levels.
Economists forecast 370,000 claims, according to the median estimate in a Bloomberg News survey. Data for New Jersey and the District of Columbia were estimated because those offices were closed because of Hurricane Sandy, a spokesman said as the figures were released.
A report by payroll-services provider Automatic Data Processing showed that businesses added 158,000 jobs last month, up from 114,000 in the previous month. Automatic Data Processing updated its methodology for the October report. It has frequently diverged sharply from the government’s figures.
The Conference Board’s Consumer Confidence Index rose to 72.2 last month. That’s 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. That’s the biggest one-year increase since1994, Kavcic said.
“The lower unemployment rate and firming of housing prices has made consumers feel a little bit more confident,” said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Ala.
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. October’s reading was still slightly below the average for the past year of 52.2.
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.
“Home builders are feeling a bit more optimistic about home sales going forward” and residential construction has been helped by low new-home inventories, Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said before the report.
The U.S. economy expanded at a 2 percent annual pace in the July-September quarter, up from 1.3 percent in the second quarter. Most economists expect growth may slow a bit in the fourth quarter, partly because of disruptions from Sandy.
Still, the economy is growing too slowly to rapidly provide relief to roughly 12 million out-of-work Americans.With the unemployment rate still high, steady growth of more than 3 percent is generally needed to create a sufficient number of jobs.
Information for this article was contributed by Christopher S. Rugaber of The Associated Press; by Alex Kowalski, Shobhana Chandra, Elizabeth Dexheimer and Michelle Jamrisko of Bloomberg News; and by Jim Puzzanghera of the Los Angeles Times.
Front Section, Pages 1 on 11/02/2012