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Wall Street opens higher after jobless claims and ahead of manufacturing data

Initial weekly claims fell by 2,000 while economists expect slight increase in ISM survey

Ahead of the latest US manufacturing survey for February, there has been a mixed picture for the world’s largest economy.

Initial jobless claims fell 2,000 last week to a seasonally adjusted 351,000 compared to expectations of a figure of around 355,000.

But consumer spending was flat for the third successive month in January, after taking inflation into account. Dr Harm Bandholz, chief US economist at UniCredit said:

Today’s [spending] report corroborates our view that economic growth in the US will temporarily slow again at the beginning of this year, after a solid performance at the end of 2011. The fact that real household spending did not rise for three consecutive months, even means that there are downside risks to our consumption forecast for the current quarter.

That said, we continue to expect that consumer spending will regain momentum in the coming months. Accordingly, we assume that the slowdown in the current quarter (we expect real GDP to expand 2% in the first quarter of 2012, after 3% in the final quarter of 2011) is merely a breather and that growth reaccelerates to 2.5% in the second half of this year.

As for the manufacturing survey, economists expect the ISM figure to rise from 54.1 to 54.6 in February although there are whispers in the market it could be a higher number, perhaps 58.

In any case, Wall Street has opened higher, with the Dow Jones Industrial Average up nearly 60 points in the first few minutes of trading. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds