Companies ordered more machinery, computers and
communication equipment in August, a positive sign for the slumping U.S.
economy.
An increase in demand for those kind of longer-lasting factory
goods suggests businesses are sticking with their investment plans, despite slow
growth and weak consumer spending.
Overall
orders for durable goods slipped 0.1 percent last month. The modest decline was
largely due to an 8.5 percent drop in orders for autos and auto parts. In July,
demand for those goods surged 10.2 percent — the biggest increase in eight
years.
At the same time, a category that measures business investment
plans rose 1.1 percent last month.
Durable goods are products expected to
last at least three years. Orders typically fluctuate from month to
month.
Manufacturing had been one of the leading sectors since the
recession officially ended two years ago. But factory growth slowed this spring
and summer, partly because of supply disruptions from Japan, but also because
consumer demand weakened.
Consumers have been paying more for food and
gas, while receiving small raises. As a result, many have cut back on
discretionary purchases, such as computers, appliances and furniture. That has
slowed growth.
The economy expanded at an annual rate of just 0.7 percent
in the first six months of this year, the weakest growth since the recession
ended.
Slow growth has led many employers to delay hiring plans. In
August, employers added zero net jobs, and the unemployment rate stayed at 9.1
percent for the second straight month.
Economists don't expect growth to
pick up much in the second half of the year.
The forecasting panel for
the National Association for Business Economics predicts 2.2 percent growth in
the second half of this year. For the full year, it predicts only 1.7 percent
growth. That would be down from the 3 percent growth last year. And it's well
below the pace needed to make a significant dent in the unemployment
rate.
Other manufacturing data have been mixed.
Factory output
rose in August, according to the Federal
Reserve. But nearly all of the gain was from a 2.6 percent rise in the
production of autos and auto parts.
Regional Fed surveys showed that
manufacturing continued to weaken in the Northeast and Mid-Atlantic area in
September.
The Federal Reserve Bank of New York said factory conditions
in that region worsened for a fourth straight month. Businesses saw fewer new
orders and paid higher prices. Factories in the region employed fewer people and
their remaining employees worked fewer hours, the New York Fed said.
The
Federal Reserve Bank of Philadelphia
said manufacturing in that region shrank in September for the third time in four
months.
communication equipment in August, a positive sign for the slumping U.S.
economy.
An increase in demand for those kind of longer-lasting factory
goods suggests businesses are sticking with their investment plans, despite slow
growth and weak consumer spending.
Overall
orders for durable goods slipped 0.1 percent last month. The modest decline was
largely due to an 8.5 percent drop in orders for autos and auto parts. In July,
demand for those goods surged 10.2 percent — the biggest increase in eight
years.
At the same time, a category that measures business investment
plans rose 1.1 percent last month.
Durable goods are products expected to
last at least three years. Orders typically fluctuate from month to
month.
Manufacturing had been one of the leading sectors since the
recession officially ended two years ago. But factory growth slowed this spring
and summer, partly because of supply disruptions from Japan, but also because
consumer demand weakened.
Consumers have been paying more for food and
gas, while receiving small raises. As a result, many have cut back on
discretionary purchases, such as computers, appliances and furniture. That has
slowed growth.
The economy expanded at an annual rate of just 0.7 percent
in the first six months of this year, the weakest growth since the recession
ended.
Slow growth has led many employers to delay hiring plans. In
August, employers added zero net jobs, and the unemployment rate stayed at 9.1
percent for the second straight month.
Economists don't expect growth to
pick up much in the second half of the year.
The forecasting panel for
the National Association for Business Economics predicts 2.2 percent growth in
the second half of this year. For the full year, it predicts only 1.7 percent
growth. That would be down from the 3 percent growth last year. And it's well
below the pace needed to make a significant dent in the unemployment
rate.
Other manufacturing data have been mixed.
Factory output
rose in August, according to the Federal
Reserve. But nearly all of the gain was from a 2.6 percent rise in the
production of autos and auto parts.
Regional Fed surveys showed that
manufacturing continued to weaken in the Northeast and Mid-Atlantic area in
September.
The Federal Reserve Bank of New York said factory conditions
in that region worsened for a fourth straight month. Businesses saw fewer new
orders and paid higher prices. Factories in the region employed fewer people and
their remaining employees worked fewer hours, the New York Fed said.
The
Federal Reserve Bank of Philadelphia
said manufacturing in that region shrank in September for the third time in four
months.
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