December 22, 2012 in Business

Economy gaining steam

Faster growth seen if ‘cliff’ is averted
Martin Crutsinger Associated Press
 

WASHINGTON – Fresh signs of a strengthening U.S. economy on Friday suggested that if Congress and the White House can avert the “fiscal cliff,” the economic recovery might finally accelerate in 2013.

Consumers spent and earned more in November. And for a second straight month, U.S. companies increased their orders for a category of manufactured goods that reflects investment plans.

In light of the latest figures, some analysts said the economy could end up growing faster in the current October-December quarter – and next year – than they previously thought.

Helping lift the optimism of some analysts was a government report that consumer spending, which fuels about 70 percent of the economy, rose 0.4 percent in November compared with October. Spending had dipped 0.1 percent in October. But that decline was linked in part to disruptions from Superstorm Sandy.

Incomes rose 0.6 percent in November, the biggest gain in 11 months. It reflected a rebound in wages and salaries, which had been depressed in October.

A separate report Friday showed that a category of durable-goods orders that tracks business investment surged 2.7 percent. That gain followed an upwardly revised 3.2 percent jump in October, the biggest in 10 months.

The back-to-back increases followed a period of weakness in so-called core capital goods that had raised concerns about business investment, a driving force in the economy.

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