Tags: Business | activity | Grow | slow

Business Activity in U.S. Grows at Slowest Pace Since 2009

Monday, 30 April 2012 11:02 AM

Business activity in the U.S. expanded in April at the slowest pace since November 2009, a sign that manufacturing may be cooling as business investment eases.

The Institute for Supply Management-Chicago Inc. said today its barometer decreased to 56.2 during the month, lower than the most pessimistic forecast in a Bloomberg News survey, from 62.2 in March. Readings greater than 50 signal growth. Economists projected the gauge would fall to 60, according to the median of 55 estimates in the survey.

A slowdown in demand may prompt companies in the U.S. to slow the rate of inventory accumulation, while exports to Europe and Asia may cool. Auto purchases may prevent a prolonged deterioration in the industry that spurred the recovery.

“We could see manufacturing slow a notch,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. Fewer inventories “will likely cause production to slow,” he said.

Projections of the economists in the Bloomberg survey ranged from 58 to 62.9.

Another report showed consumer spending climbed in March after the biggest gain since August 2009, and incomes picked up, indicating the biggest part of the economy will help sustain the expansion.

Household purchases, which account for about 70 percent of the economy, increased 0.3 percent, after a revised 0.9 percent gain the prior month that was stronger than first reported, according to the Commerce Department in Washington. Incomes advanced 0.4 percent, the most in three months, and the savings rate rose.

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Monday, 30 April 2012 11:02 AM
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