Personal incomes and consumer spending grew slightly in September. The ISM manufacturing index rose to 56.9 in October, indicating expansion, driven by increases in new orders, production, and employment. Construction spending increased 0.5% from August to September, with residential construction rising the most at 1.8%. While income growth remains slow, demand for goods and manufacturing employment are positive signs for the labor market and sustained economic recovery.

1. Daily Economic Update
 Personal income and outlays figures for September were released this morning. In that report,
disposable personal incomes eased slightly, 0.2%, after gaining 0.4% in August. Consumer
spending decelerated to a gain of 0.2% in September, after a 0.5% jump in August. Sales of durable
goods led consumer spending by growing 0.7%. The PCE inflation index, a measure of growth in
prices similar to the consumer price index, rose just 0.1%.
 The ISM manufacturing index gained in October, up a solid 2.5 points to 56.9. Orders, production,
and employment all rose, but a 7.8 point surge in new orders pushed the index further above the
critical 50 mark, an indication that this sector is expanding. Employment rose 1.2 points to 57.7.
 Construction spending rose 0.5% from August to September. Residential construction rose 1.8%
from August, while non-residential slipped 1.6%. Public sector construction rose 1.3% from August
to September.
 Income growth remains sluggish, but demand for goods was solid. The improved demand for
manufactured goods and residential home construction are positive signs for the labor market.
Echoing this trend was the upward movement of employment in the manufacturing sector.
Employment and confidence are critical to a sustained economic recovery. While today’s reading is
not an overwhelming sign, it is a move in the right direction.
Produced by NAR Research
November 1, 2010