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Alexkid

Job growth is lifting hopes for consumer spending
MARTIN CRUTSINGER
(The Associated Press)



12:43:26AM (ET) Sunday,December 25,2011.

WASHINGTON (AP) — Consumer spending and incomes barely rose last month. Business investment has slowed. New-home sales remain dismal.

Despite all that, some economists say a brightening job market is lifting their hopes for 2012. More aggressive hiring, the thinking goes, would fuel enough spending to boost the economy.

Economists point to another drop reported this week in applications for unemployment benefits, the third straight decline. Applications are now at their lowest level since April 2008. The trend is signaling that layoffs have all but stalled and that employers may be ready to step up hiring.

Unemployment, after hovering around 9 percent for more than two years, dropped in November to 8.6 percent. Employers have added at least 100,000 jobs each month from July through November. It's the best such streak since 2006.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said he expects the economy to grow at a 2.5 percent annual rate in the current October-December quarter. That would be the best performance in a year.

More jobs would mean more income. More pay tends to raise consumer spending, which makes up about 70 percent of the economy. Companies then have reason to increase hiring to meet stronger demand.

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May see some progress in 2012.

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