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Durable Goods Expected To Have Risen

Thursday, 24 Dec 2009 07:07 AM

Orders to U.S. factories for big-ticket manufactured goods are expected to have rebounded in November, signaling that manufacturing is participating in the recovery from the nation's deepest recession since the 1930s.

Economists surveyed by Thomson Reuters expect orders for durable goods posted a 0.5 percent rise in November following a 0.6 percent decline the previous month. The Commerce Department will release the report at 8:30 a.m. EST Thursday.

The economists believe that orders, excluding autos and other parts of the transportation sector, rose by 1 percent in November, compared to October. Orders excluding transportation fell 1.3 percent in October.

The strength in November is likely to have come despite a weak showing for sales of commercial airliners.

Durable goods are items expected to last at least three years.

Economists are hoping that the fortunes of the manufacturing sector are beginning to rebound after the recession briefly forced two major U.S. automakers — General Motors and Chrysler LLC — into bankruptcy protection earlier this year.

The overall economy, as measured by the gross domestic product, grew at an annual rate of 2.2 percent in the July-September quarter, the government reported on Tuesday.

That marked a downward revision from an estimate of 2.8 percent GDP growth made a month ago. However, it was still the first positive performance for GDP and is the strongest sign to date that the recession that began in December 2007 has ended.

Economists expect GDP to rebound to even stronger growth in the current October-December quarter, helped by a shift by companies from reducing inventories to restocking their depleted shelves, a change that will result in increased orders and production at U.S. factories.

The concern, however, is that the economic recovery could falter in coming months if consumers, fearful about continued increases in the jobless rate, decide to cut back on their spending, which accounts for 70 percent of total economic activity.

The government reported Wednesday that consumer spending rose by 0.5 percent in November, the second straight monthly increase as incomes, the fuel for future spending, rose by 0.4 percent, the fastest pace in six months. Analysts, however, are worried that these gains will taper off in coming months.

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Orders to U.S. factories for big-ticket manufactured goods are expected to have rebounded in November, signaling that manufacturing is participating in the recovery from the nation's deepest recession since the 1930s.Economists surveyed by Thomson Reuters expect orders for...
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Thursday, 24 Dec 2009 07:07 AM
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