U.S. factory orders post sharpest decline in four months

WASHINGTON Thu Sep 5, 2013 10:03am EDT

A worker assembles a wing flap for the Boeing 737-900 at their operations in Renton, Washington, October 18, 2012. REUTERS/Andy Clark

A worker assembles a wing flap for the Boeing 737-900 at their operations in Renton, Washington, October 18, 2012.

Credit: Reuters/Andy Clark

WASHINGTON (Reuters) - New orders for U.S. factory goods dropped in July by the most in four months, a worrisome sign for economic growth in the third quarter.

The Commerce Department on Thursday said new orders for manufactured goods dropped 2.4 percent. Analysts polled by Reuters had expected an even sharper decline.

The decline was spread broadly across the nation's factories, from those producing computers and machinery to cars and electrical equipment.

Manufacturing slowed in the spring, hobbled by tight fiscal policy and weak global demand.

While a survey in August of purchasing managers by the Institute of Supply Management pointed to improving confidence in the sector, the picture in July still looked dour.

New orders for capital goods other than military items and aircraft, which is seen as a gauge of business spending plans, dropped 4 percent in July, its steepest decline since February.

Shipments of this category, which directly feed into the Commerce Department's calculations of economic growth, also slipped.

(Reporting by Jason Lange; Editing by Krista Hughes)

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Comments (3)
AZreb wrote:
Service industry increase in employment – majority of those positions are minimum wage jobs – while manufacturing orders dropped. The trade deficit has risen, too – we are buying more than we are selling to other countries.

This is not good.

Sep 05, 2013 10:22am EDT  --  Report as abuse
nose2066 wrote:
Just one or two days ago, the headlines were full of good news about increased automobile sales and increased production schedules at factories. We have a manic-depressive economy?

Sep 05, 2013 11:36am EDT  --  Report as abuse
dareconomics wrote:
Jobs numbers improved, auto sales surged and PMIs for both services and manufacturing rose last month. If you concentrate on just those figures, which are endlessly hyped in the media, you must conclude that American GDP growth is strengthening. The big picture still shows more of the same, the New Normal. Consumer confidence fell in August, and this number has not remotely approached its 2007 peak as illustrated in the chart above.

New factory orders also sank 2.6%, which is in line with shrinking business investment. As usual, some numbers show growth while others point to a looming recession. While I do not believe that a recession is in the cards, neither is a strengthening economy.

Full post with charts, images and links:

http://dareconomics.wordpress.com/2013/09/05/around-the-globe-09-05-2013/ ‎

Sep 05, 2013 2:01pm EDT  --  Report as abuse
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