US manufacturers struggling
WASHINGTON DC — A spate of data painted a mixed picture of the US economy yesterday.
Demand for long-lasting manufactured goods fell and slightly fewer people signed contracts to buy homes. At the same time, the job market looked a little better.
Taken together, the reports suggest the economy is growing only modestly and not quickly enough to spur much hiring.
"The economy overall has only weak forward momentum," Nigel Gault, chief US economist at IHS Global Insight, said in a note to clients. "The news from housing may be improving, but manufacturing is struggling now."
Most of the data seemed discouraging on the surface, but a closer inspection of the details offered some promise.
Companies cut orders for long-lasting goods by 13.2 per cent in August, the Commerce Department said. That was the biggest drop in more than three years but it was largely influenced by a 102 per cent decline in volatile aircraft orders. Excluding transportation equipment, orders fell only 1.6 per cent. And in a positive sign, orders in a category that reflect business investment plans rose 1.1 per cent, the first increase since May.
The overall economy grew at a 1.3 per cent annual rate in the April-June quarter, much lower than the 1.7 per cent the government previously estimated. About half of the downward revision stemmed from the severe drought in the Midwest, which cut overall farm output. But growth also fell because exports and consumer spending expanded at a slower pace.
The number of Americans who signed contracts to buy previously occupied homes fell in August from a two-year high in July. The National Association of Realtors said its index of sales agreements declined 2.6 per cent to 99.2.