Wednesday, February 28, 2007

Sluggish Durable Goods Orders

Financial Times reports sluggishness in durable goods orders in the U.S.:

The thin order books also prompted Wall Street economists to revisit their forecasts for growth for the first quarter, following already severely reduced expectations for growth last quarter.

Haseeb Ahmed, an economist at JPMorgan, said: “The weakness in orders points to softness ahead for manufacturing and sluggish capital spending. The weakness was broad-based and points to clear risk to our forecasts.”

The fall in orders was led by big drops in demand in volatile sectors such as aircraft, which fell 59 per cent.

Demand for capital goods excluding defence and aircraft orders fell 6 per cent, while orders for motor vehicles and parts dropped 5.1 per cent. However, there were signs of renewed vigour among American consumers, who defied expectations and saw increased confidence this month, according to a private survey by the Conference Board.

There were signs of tentative stability in the housing market as sales of existing homes rose by 3 per cent last month, the biggest rise in two years.

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