US economy maintains growth at start of fourth quarter

The United States economy has been among the best performers among the developed economies in recent months and data last week suggest that that superior performance has persisted at least at the start of the fourth quarter, with the world's largest economy showing signs that it continues to grow even as the eurozone and Japanese economies continue to look troubled.

The US economy added 171,000 jobs in October, better than the 148,000 increase in September, better than the 125,000 increase estimated by economists surveyed by Bloomberg, and better than the 157,000 average monthly increase so far this year.

The continued recovery in the job market has helped to boost consumer confidence in the US. The Conference Board's consumer confidence index rose to 72.2 in October, the highest since February 2008, from 68.4 in September.

US manufacturing also accelerated in October. The Institute for Supply Management's manufacturing PMI rose to 51.7 last month from 51.5 in September.

In contrast, Markit's manufacturing PMI for the euro area fell to 45.4 in October from 46.1 in September, indicating a contraction in the eurozone manufacturing sector for a fifteenth successive month.

Another indication of economic weakness in the euro area was the European Commission's economic sentiment indicator for the region, which fell to 84.5 in October from 85.2 in September, the eighth consecutive decline.

Another economy that showed weakness last week was Japan's. Industrial production there fell 4.1 percent in September and a survey of manufacturers showed that production was expected to decline by another 1.5 percent in October before rising 1.6 percent in November. Indeed, the Markit/JMMA manufacturing PMI fell to 46.9 in October, the lowest level in 18 months, from 48.0 in September.

Fortunately, another key economy, China's, has held up better.

Manufacturing in China improved in October. The manufacturing PMI from the China Federation of Logistics and Purchasing and the National Bureau of Statistics rose to 50.2 in October from 49.8 in September while HSBC's manufacturing index rose to 49.5 in October from 47.9 in September.

Services also improved. The services PMI from the China Federation of Logistics and Purchasing and the National Bureau of Statistics rose to 55.5 in October from 53.7 in September.