Bill Losey’s Weekly Economic Report for Oct. 11, 2010

JOBS REPORT COULD PROMPT FED RESPONSE
The U.S. economy shed 95,000 non-farming jobs in September – mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.

PENDING HOME SALES UP 4.3% FOR AUGUST
The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.

SERVICE SECTOR GROWTH RATE INCREASES
The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.

TWO BIG BANKS HALT FORECLOSURES
Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank of America decided last week to extend its freeze on foreclosures to all 50 states. PNC Financial Services Group also announced last week that it was halting foreclosure sales for one month.

FACTORY ORDERS HINT AT COMPANIES UPGRADING
In August, orders for non-military capital goods excluding aircraft rose 5.1%. This marks the best month for such orders since March 2010, according to Commerce Department data. Overall capital goods orders declined by 0.5%.

DOW CLOSES NORTH OF 11,000
The index gained 1.63% last week to settle Friday at 11,006.48 – the first close over 11,000 since May 3. The NASDAQ advanced 1.31% on the week to settle Friday at 2,401.91. The S&P 500 closed at 1,165.13 Friday after a 1.65% weekly gain.