Bill Losey’s Weekly Economic Update for Nov. 8, 2010

FIRST NET JOB GAIN SINCE MAY
Economists polled by Dow Jones Newswires thought non-farm payrolls would increase by about 60,000 for October. In a pleasant surprise, the economy added 151,000 jobs instead. While the jobless rate remained at 9.6% for October, Labor Department data showed the economy adding jobs for the first time in five months – a development implying moderate growth instead of a “double dip” recession.

TWO MORE SIGNALS OF EXPANSION
The Institute for Supply Management released its October assessments of the manufacturing and service sectors last week, and both ISM indices showed improvement. The manufacturing index climbed to 56.9 from 54.4 and the service sector index improved to 54.3 from September’s 53.2 reading.

CONSUMERS SPEND A BIT MORE
September’s personal spending gain wasn’t that impressive – just 0.2%. Economists surveyed by Bloomberg had forecast a 0.4% increase in for the month. The Commerce Department data also showed a 0.1% decrease in personal income, the first such reduction since July 2009.

PENDING HOME SALES SUDDENLY SLIP
They fell by 1.8% in September, according to the National Association of Realtors. They haven’t declined in three months. September 2010 pending sales were 24.9% underneath year-ago levels.

STOCKS HIT 2010 HIGHS
The Dow, S&P 500 and NASDAQ quickly reached YTD peaks after the Federal Reserve announced its plans to buy $600 billion worth of Treasuries over the next eight months. Here is how the big three performed last week: Dow, +2.93% to 11,444.08; S&P 500, +3.60% to 1,225.85; NASDAQ, +2.85% to 2,578.98. Some key commodities took off as well – oil prices gained $5.42 on the week, gold gained $40.20 across five days to close at $1,397.30 on the COMEX Friday, and copper advanced 5.68% for the week.