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Latest US figures signal stronger Q4

US economy - Spending on the rise
US economy - Spending on the rise

New figures have reinforced a picture of solid growth in the US economy in the final quarter of this year.

New US claims for jobless benefits dipped last week, while consumer spending increased in November for a fifth straight month.

Initial jobless claims fell 3,000 to a seasonally adjusted 420,000, the Labor Department said, matching economists' expectations.

A separate report from the Commerce Department showed that spending rose 0.4% after increasing by an upwardly revised 0.7% in October. Spending accounts for about 70% of US economic activity.

In another report, the Commerce Department said orders for long-lasting manufactured goods excluding transport increased by 2.4%, the largest increase since March, after a 1.9% drop in October.

But overall orders dropped by a larger than expected 1.3% last month, dragged down by a plunge in bookings for civilian aircraft and motor vehicles.

The reports were the latest in a series to suggest growth accelerated in the fourth quarter. The economy grew at a 2.6% annualised pace in the third quarter and many forecasters expect gross domestic product to expand at a 3% to 3.5% annual pace in the current quarter.

The spending report also showed that the Federal Reserve's preferred measure of consumer inflation - the personal consumption expenditures price index, excluding food and energy - rose 0.1% after being flat for four straight months.

In the 12 months to November, the core PCE index rose 0.8%, the same margin as in October and still the smallest year-on-year gain since records started in 1960.

Spending was supported by a 0.3% increase in incomes, which was slightly more than the 0.2% rise that economists had expected.