U.S. factory orders slip for 3rd month in a row
U.S. factory orders tumbled for the third month in a row in September, further confirmation that American manufacturers are in for a tough Christmas, according to figures released on Tuesday.
The U.S. Commerce Department said new orders for products from American factories topped out at $432 billion US in September. That figure represented a slide of 2.5 per cent compared with August and a 5.6 per cent drop since the last positive month, June, when new orders reached $457.6 billion.
Orders for non-durable goods slipped by 5.5 per cent in September, the biggest decline in two years.
Perhaps even more worrying, however, were rising inventory levels.
Goods piling up in the manufacturers' warehouses rose 0.4 per cent or $1.2 billion in September. That made the monthly level for inventories — $340.3 billion — the highest figure since 1992.
Inventory stockpiling either can represent companies getting enough product on hand for the coming Christmas selling season or the slowing in final demand by retailers, a situation which could force companies to chop prices in order to clear the growing piles of unsold products.
New orders for durable goods, usually an indication of longer-term economic strength or weakness, inched up 0.9 per cent in September.
Once transportation is subtracted, however, the amount of new manufacturing orders of durable goods tumbled badly, off a record 3.7 per cent in September.
These figures reinforced what other numbers have indicated regarding manufacturers for months; the outlook is bad and deteriorating.
The Institute for Supply Management fell to 38.9 per cent in October, down from 43.5 per cent in September and hitting the lowest level since 1982. A sustained reading in this survey index greater than 41.1 per cent indicates a growing economy.
Some of the increasing anxiety among manufacturers has been reflected in the recent slide of the American dollar. On Tuesday, the U.S. greenback fell against most of currencies.
US $ (%) decline versus Tues. am Japan yen 0.6 Euro2.5 British pound1.8Some analysts said rising stock markets in Europe and Japan are driving up the demand for those currencies as buyers seek to invest in better performing markets.
As well, the American dollar has benefited from the weakening global economic situation. Investors have been more willing to hold the U.S. currency in the face of the growing financial storm on the theory that the powerful American economy will backstop any precipitous slide in the value of the dollar.
As the extent of the U.S. recession becomes clearer, however, the willingness of foreigners to hold American dollars might wane.
0 comments:
Post a Comment