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Consumers Give US Economy A Lift Before Election

Stocks in this article: F GM TM

A report by payroll provider ADP showed that private companies added 158,000 jobs in October, up from 114,000 in September. ADP updated its methodology for the October report. It has frequently diverged sharply from the government's figures.

The U.S. economy expanded at a 2 percent annual pace in the July-September quarter, up from 1.3 percent in the second quarter. Most economists expect growth may slow a bit in the fourth quarter, partly because of disruptions from Superstorm Sandy.

Still, even at 2 percent annual growth, the economy is growing too slowly to bring rapid relief to roughly 12 million out-of-work Americans. With the unemployment rate still high, steady growth of more than 3 percent is generally needed to reduce it.

â¿¿ AUTO SALES:

Americans are buying more big-ticket items, like cars and appliances. Auto companies reported steady sales gains last month despite losing three days of business to the storm in heavily populated areas of the Northeast.

Toyota said its sales rose nearly 16 percent for the month. Volkswagen reported a 22 percent jump. Honda's sales gained 8.8 percent. Chrysler's sales rose 10 percent, General Motors' 5 percent and Ford's less than 1 percent.

â¿¿ MANUFACTURING:

Steady consumer spending is supporting gains in U.S. factory production. That's true even though businesses in the United States and overseas have reduced their demand for high-cost manufactured goods.

The Institute for Supply Management, a private trade group, said its index of factory activity ticked up to 51.7 in October from 51.5, slightly below the average for the past year of 52.2. A reading above 50 indicates expansion.

The ISM said new orders and production rose. The increase came mainly in consumer-oriented industries such as furniture, food and beverages, and computers. Demand for machinery, chemical products, steel and other metals fell.

U.S. businesses have become more cautious in recent months. Some are concerned that Congress will fail to reach a budget deal before January. If lawmakers can't strike an agreement, sharp tax increases and spending cuts will take effect next year and could trigger another recession.

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