Voice of America
25 Mar 2020, 20:05 GMT+10
WASHINGTON - New orders for long-lasting U.S. manufactured goods unexpectedly rose in February, but are set to decline as strict measures to contain the coronavirus pandemic sap demand and push the economy into recession.
Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, accelerated 1.2% last month, the Commerce Department reported on Wednesday. Data for January was revised up to show durable goods orders gaining 0.1% instead of slipping 0.2% as previously reported. Economists polled by Reuters had forecast durable goods orders dropping 0.8% in February.
The highly contagious coronavirus, which causes a respiratory illness called COVID-19 has brought the economy to a sudden halt. Governors in at least 18 states, accounting for nearly half the country's population, have ordered residents to stay mostly indoors, except for necessary trips to grocery stores, pharmacies, gas stations and doctors' offices.
"Non-essential" businesses have also been ordered closed, leading to massive unemployment and a rush to apply for jobless benefits. Though these measures have hit the services sector harder, manufacturing has not been spared as supply chains become fractured. The sector, which account for 11% of the U.S. economy, had been showing signs of stabilizing after a prolonged downturn before the outbreak of the virus.
A survey by data firm IHS Markit on Tuesday showed its gauge of U.S. factory activity dropped in March to its lowest level since August 2009. The abrupt stop in business activity has led analysts to predict that the economy was already in recession.
Recessions in the United States are called by the National Bureau of Economic Research. The NBER's business cycle dating committee does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in economic activity, spread across the economy and lasting more than a few months.
The Federal Reserve has taken extraordinary steps to aid the economy, including slashing interest rates to zero, promising bottomless dollar funding and implementing an array of programs to help keep companies afloat.
Durable goods orders rose 0.4% on a year-on-year basis in February. Monthly durable goods orders were boosted by a 4.6% rebound in orders for transportation equipment, which followed a 0.9% decline in January.
Orders for civilian aircraft slipped 0.3% last month after soaring 356.7% in January. Motor vehicles and parts orders accelerated 1.8% in February after falling 0.5%.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.8% in February after rising by a slightly downwardly revised 1.0% in January. These so-called core capital goods orders were previously reported to have increased 1.1% in January.
There were decreases in orders for machinery, primary metals and computers and electronics products in February. But demand for electrical equipment, appliances and components increased 1.3% last month.
Shipments of core capital goods fell 0.7% last month. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
They increased 1.1% in January. Business investment has contracted for three straight quarters, the longest such stretch since 2009. Economists have blamed the business investment downturn on the Trump Administration's 20-month-old trade war with China.
Get a daily dose of International Technology news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to International Technology.
More InformationCULVER CITY, California: TikTok is preparing to roll out a separate version of its app for U.S. users, as efforts to secure a sale...
The IPO boom is breathing new life into Hong Kong's capital market, not only helping companies tap international opportunities, but...
CHANGCHUN, July 8 (Xinhua) -- Hemmed in by Russia's frozen coastline and the secluded mountains of the Democratic People's Republic...
SOF Connect, in collaboration with global retail and food & beverage leader Avolta, announced two major projects aimed at enhancing...
Interest in Kiswahili among Chinese nationals is steadily rising. It represents a growing movement of cultural curiosity, mutual respect,...
Hyderabad (Telangana) [India], July 7 (ANI): Ahead of his birthday, Bharat Rashtra Samithi (BRS) Working President KT Rama Rao (KTR)...
CULVER CITY, California: TikTok is preparing to roll out a separate version of its app for U.S. users, as efforts to secure a sale...
PALO ALTO/TEL AVIV: The battle for top AI talent has claimed another high-profile casualty—this time at Safe Superintelligence (SSI),...
New Delhi [India], July 9 (ANI): The user trials of the made-in-India anti-submarine Extended Range Anti-Submarine Rocket (ERASR) have...
Washington, DC [US], July 8 (ANI): Tesla CEO Elon Musk has announced that exposing the Jeffrey Epstein files will be a top priority...
The offer pops up in your social media feed. The website is professional and the imagery illustrates an Australian coastal region,...
(Photo credit: Raymond Carlin III-Imagn Images) BYU coach Kalani Sitake plans to let quarterback Jake Retzlaff speak for himself...