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U.S. factories grow despite partners

Monday, October 01, 2012 - 01:58

Oct 1 - U.S. manufacturing expands in September as Europe and China shrink, but can the U.S. keep growing without its troubled trade partners? Carmen Roberts reports.

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Manufacturing in the U.S. showed signs of life last month as Europe and Asia contracted. That U.S. boost surprised economists who have been worried about manufacturing given the worldwide slowdown in exports and negative sentiment among corporate leaders. The Institute for Supply Management says U.S. factories cranked up production in September after three months of weakness. And reports by the financial information firm, Markit, illustrate the growing gap between U.S. expansion and contraction in China and the euro zone. With all that, can the U.S. keep pushing forward as two of its biggest trading partners trudge along? Wells Fargo Chief Economist John Silvia, says yes, because U.S. manufacturing is diversified globally. SOUNDBITE: JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO (ENGLISH) SAYING: "There's a lot of activity going on in Latin America and Brazil, Indonesia, Turkey and the Middle East. So the benefit for us in manufacturing is it's pretty globally diversified in terms of where we send out output." Still, the ill effects from the global slowdown are being felt in the U.S. Conditions are troubling in the euro zone plus China's cooling down. Both are like an anchor dragging on the U.S. economic steamship. SOUNDBITE: JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO (ENGLISH) SAYING: "We can continue to grow, but we're going to grow at perhaps a sub-par pace until maybe China picks up again and Europe picks up again, and we work through some of the policy issues we have in the United States." The presidential election next month may clear up some of those policy issues, but even if the U.S. economy picks up more speed, economists will closely watch developments in Europe and China that may show contraction for months to come. Carmen Roberts, Reuters.

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U.S. factories grow despite partners

Monday, October 01, 2012 - 01:58