US factories enter longest stretch of rapid growth in 30 years

[Stu]

Great news. Roll on.

US factories enter longest stretch of rapid growth in 30 years

Mon Aug 2,11:53 AM ET Add Business - AFP to My Yahoo!

WASHINGTON (AFP) - The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed.

The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts.

It was the 14th consecutive reading above 50 points, which indicates an expansion in activity.

"The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement.

"This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.

Key findings in the report showed:

-- New orders sped up, with the index rising 4.7 points from June to 64.7 in July.

-- Production accelerated, with the index up 2.9 to 66.1.

-- Employment grew, albeit at a slower rate, with the index easing 2.4 to 57.3.

-- Input prices rose at slower pace, with the index falling 4.0 points to 77.0.

"Today's ISM report provides further verification of the strong state of US manufacturing," said Manufacturers Alliance/MAPI president and chief executive Thomas Duesterberg.

"Overall economic growth in the second half of 2004 will be fueled by strong business equipment investment, purchases of high technology durable goods, and robust exports," he said.

"Leadership is now passing from the consumer and the government to the industrial economy, which bodes well for continued strength in manufacturing jobs and productivity."

The report added to signs that Corporate America is taking over the economic leadership from consumers, who buckled in June under high fuel prices, rising interest rates and the waning impact of tax cuts.

A government report Friday showed the economy slowed sharply in the second quarter to a 3.0-percent annual growth pace from 4.5 percent in the first quarter as consumer spending rose just 1.0 percent.

In the same period, business investment jumped 8.9 percent in the second quarter, up from 4.2 percent in the first. Spending on equipment and software rose 10 percent, up from eight percent.

Many economists expect economic growth to speed up in the second half of the year as consumers bounce back despite an expectation of gently rising short-term interest rates.

US President George W. Bush (news - web sites), campaigning for re-election November 2, highlighted recent reports showing record existing home sales in June and consumer confidence at a two-year high in July.

"These gains in our economy have come at a time when Americans are benefitting from the full effects of tax relief," he said in a weekend radio address.

Democratic presidential challenger John Kerry (news - web sites) has seized on job losses, a middle class "squeeze" and record deficits in the administration's budgets to argue that Bush has mismanaged the US economy.

http://story.news.yahoo.com/news?tmpl=story&cid=1519&ncid=749&e=6&u=/afp/20040802/bs_afp/us_economy

[Dexter's Better]

Wait -- 3 months ago John Kerry was saying the economy was in shambles... that we were heading toward certain doom. Was that a LIE?

[Thiebear]

What are the MAJOR focus' of the Election right now..

The economy? what a shambles, were all eating dirt samich'es and muddy water.

The war? Horrible, two countries given back to the people and the troops are still there helping them form a more perfect union, provide for the common defense and promote the general welfare... (The lead Cleric spoke out)? OHH the horror...

Education? Kennedy wrote the bill.... but were not funding it the way it should be.. yah yah yah, D.C. spends more than any other *state* yet does really poorly due to parents/teachers/administration...

Homeland Security? Wouldnt bring that up right now, Dean just got slammed by everyone and OUR allies seem to be doing a really good job at capturing / killing the leadership.. Go Pak! Going to have to get them a Mascot or something at this point...

How many people have gone to jail over the horrible Patriot Act?

(keep an eye on it though, i'm not toooooo fond of it)...

I just hate Bush: O.K. I can't argue with your feelings...

[Cskin]

I thought Donna Brazille said this economy was the worst since the Depression? I haven't had a dirt sandwich yet!!

[Kilmer17]

In the words of Bill Maher "Poor people in the US are fat"

[SnyderShrugged]

This seems like awesome news!

My entire career is focused on efficiencies (Six Sigma)and it seems as though many programs are working.

Honestly, I don't think productivity has much to do with politics. I feel these gains have been done through waste reduction and limiting variability in thir core processes.

Neither GOP or DEM's have much influence there.

[SnyderShrugged]

Any reaction from a "left" point of view?

[The Evil Genius]

Well, since I am often lumped with the left...might I state that there a lot of conflicting views out there. Including this one - which includes a lot of positive and some negative signs of a recovering economy.

Consumer Spending Drop Biggest Since 9/11

By Tim Ahmann

WASHINGTON (Reuters) - U.S. consumer spending in June took its biggest plunge since September 2001 as shoppers shunned car showrooms, but auto sales roared back last month, offering hope the economy was leaving its soft patch behind.

Personal spending dropped 0.7 percent in June after climbing 1 percent in May, the Commerce Department (news - web sites) said on Tuesday. Adjusted for inflation, spending tumbled 0.9 percent.

By both measures, it was the biggest drop in consumer spending since September 2001, when shoppers retrenched in the wake of the attacks on New York and Washington.

However, much of the drop was pinned on autos and strong July sales figures from carmakers supported the view the economy would emerge unscathed from a pothole hit in June.

Still, the size of the June spending drop surprised Wall Street, which had been braced for a mild 0.1 percent decline.

Coupled with an upward spiral in oil prices, the report pushed stocks lower, with the blue chip Dow Jones industrial average off over 60 points in late-afternoon.

In addition, prices for U.S. government bonds rose and the dollar slipped as the report was seen bolstering the case for the Federal Reserve (news - web sites) to move cautiously as it raises interest rates from multi-decade lows.

"The second quarter was a kind of disappointment and a lot of that has to do higher energy prices. That zapped some of the demand from the economy," said George Mokrzan, chief economist at Huntington Financial Group in Columbus, Ohio.

Many economists are confident the economy has already begun working its way out of a spending soft spot, but a renewed rise in oil prices could throw up an economic hurdle. NYMEX crude oil futures hit a record high and closed over $44 a barrel.

Another report suggested the U.S. labor market recovery was struggling to gain momentum. Outplacement firm Challenger, Gray & Christmas said employers announced 69,572 job cuts in July, up from 64,343 in June, but down 18 percent from a year ago.

Rick Cobb, executive vice president at the firm, said the upcoming U.S. elections and sputtering economic growth seemed to be making employers hesitant to hire.

SALES DRIVE HIGHER

The Commerce Department said spending on expensive, long-lasting manufactured goods plunged an inflation-adjusted 5.8 percent in June, after a 3.7 percent gain a month earlier, with auto sales accounting for most of that drop.

Economists said the fresh figures from automakers appeared set to give July data a better tone.

Analysts awaiting complete results said U.S. sales of North American-made autos in July looked set to come in close to a 14 million unit annual rate, a sharp rebound from June's slack 12 million and well ahead of forecasts near 13 million.

"July might represent one of the largest gains in consumer spending in many months," Steve Wieting of Citigroup Global Markets said before the auto results were released.

The report on consumer spending showed incomes up a tepid 0.2 percent in June, a slowdown from May's 0.6 percent gain and the smallest advance in over a year.

After inflation and taxes, the meager income gain left consumers no better off than they had been a month earlier. The department said disposable income rose 0.2 percent, but was unchanged when inflation was taken into account.

Wages, which had risen 0.6 percent in May, were unchanged in June, the weakest reading since December.

The Commerce report showed inflation moderated in June, with the price index for consumer purchases up just 0.2 percent after a 0.4 percent increase in May. Excluding volatile food and energy costs, inflation rose a scant 0.1 percent for the second month in a row.

Fed officials are set to meet next Tuesday and are widely expected to raise overnight interest rates by a quarter-percentage point to 1.5 percent. Officials have said they should be able to pursue a "measured" campaign of interest rate rises along as inflationary pressures remain subdued.

Other reports on Tuesday showed U.S. chain stores sales up from year-ago levels, bolstering the view among economists that spending is once again on the rise.

[SnyderShrugged]

Originally posted by The Evil Genius

Well, since I am often lumped with the left...might I state that there a lot of conflicting views out there. Including this one - which includes a lot of positive and some negative signs of a recovering economy.

Consumer Spending Drop Biggest Since 9/11

By Tim Ahmann

WASHINGTON (Reuters) - U.S. consumer spending in June took its biggest plunge since September 2001 as shoppers shunned car showrooms, but auto sales roared back last month, offering hope the economy was leaving its soft patch behind.

Personal spending dropped 0.7 percent in June after climbing 1 percent in May, the Commerce Department (news - web sites) said on Tuesday. Adjusted for inflation, spending tumbled 0.9 percent.

By both measures, it was the biggest drop in consumer spending since September 2001, when shoppers retrenched in the wake of the attacks on New York and Washington.

However, much of the drop was pinned on autos and strong July sales figures from carmakers supported the view the economy would emerge unscathed from a pothole hit in June.

Still, the size of the June spending drop surprised Wall Street, which had been braced for a mild 0.1 percent decline.

Coupled with an upward spiral in oil prices, the report pushed stocks lower, with the blue chip Dow Jones industrial average off over 60 points in late-afternoon.

In addition, prices for U.S. government bonds rose and the dollar slipped as the report was seen bolstering the case for the Federal Reserve (news - web sites) to move cautiously as it raises interest rates from multi-decade lows.

"The second quarter was a kind of disappointment and a lot of that has to do higher energy prices. That zapped some of the demand from the economy," said George Mokrzan, chief economist at Huntington Financial Group in Columbus, Ohio.

Many economists are confident the economy has already begun working its way out of a spending soft spot, but a renewed rise in oil prices could throw up an economic hurdle. NYMEX crude oil futures hit a record high and closed over $44 a barrel.

Another report suggested the U.S. labor market recovery was struggling to gain momentum. Outplacement firm Challenger, Gray & Christmas said employers announced 69,572 job cuts in July, up from 64,343 in June, but down 18 percent from a year ago.

Rick Cobb, executive vice president at the firm, said the upcoming U.S. elections and sputtering economic growth seemed to be making employers hesitant to hire.

SALES DRIVE HIGHER

The Commerce Department said spending on expensive, long-lasting manufactured goods plunged an inflation-adjusted 5.8 percent in June, after a 3.7 percent gain a month earlier, with auto sales accounting for most of that drop.

Economists said the fresh figures from automakers appeared set to give July data a better tone.

Analysts awaiting complete results said U.S. sales of North American-made autos in July looked set to come in close to a 14 million unit annual rate, a sharp rebound from June's slack 12 million and well ahead of forecasts near 13 million.

"July might represent one of the largest gains in consumer spending in many months," Steve Wieting of Citigroup Global Markets said before the auto results were released.

The report on consumer spending showed incomes up a tepid 0.2 percent in June, a slowdown from May's 0.6 percent gain and the smallest advance in over a year.

After inflation and taxes, the meager income gain left consumers no better off than they had been a month earlier. The department said disposable income rose 0.2 percent, but was unchanged when inflation was taken into account.

Wages, which had risen 0.6 percent in May, were unchanged in June, the weakest reading since December.

The Commerce report showed inflation moderated in June, with the price index for consumer purchases up just 0.2 percent after a 0.4 percent increase in May. Excluding volatile food and energy costs, inflation rose a scant 0.1 percent for the second month in a row.

Fed officials are set to meet next Tuesday and are widely expected to raise overnight interest rates by a quarter-percentage point to 1.5 percent. Officials have said they should be able to pursue a "measured" campaign of interest rate rises along as inflationary pressures remain subdued.

Other reports on Tuesday showed U.S. chain stores sales up from year-ago levels, bolstering the view among economists that spending is once again on the rise.

That's cool, but July numbers for the big three are reported to be much better.

[Cskin]

That's the EG I know... always finding the needle in the haystack.

[The Evil Genius]

Originally posted by Cskin

That's the EG I know... always finding the needle in the haystack.

Not much of a needle, it was front page news on Yahoo earlier today.

What's the true state of the economy? Well, it depends on which economist you listen too and what factors they use.

[flashback]

No offense, but I think a lot more Americans are familiar with Consumer Spending than the Institute for Supply Management purchasing managers' index.

Righties, I'm real surprised to see you using AFP articles to support your cause. I think you'd have a different reaction if the AFP was putting out bad news for Bush.

[Stu]

Originally posted by flashback .Righties, I'm real surprised to see you using AFP articles to support your cause. I think you'd have a different reaction if the AFP was putting out bad news for Bush.

Good news is good news regardless of the source and a good economy should transcend partisanship.

[flashback]

Originally posted by Stu

Good news is good news regardless of the source and a good economy should transcend partisanship.

I agree. I'm just surprised it transcends francophobia.

So, I take you'll be refraining from criticizing President Kerry, at least while our troops are in harms way, right?

[Stu]

Originally posted by flashback I agree. I'm just surprised it transcends francophobia.

So, I take you'll be refraining from criticizing President Kerry, at least while our troops are in harms way, right?

I'm not sure I understand the "francophobia" reference. The thought of fearing anything French humors me. They can't even build an aircraft carrier correctly.

As a member of the Armed Forces, I fully support the efforts of my Commander-in-Chief no matter who he is. In fact, I have sworn and oath to do so. That was true for President Clinton and would be the case for a potential President Kerry. While I might quietly express my disagreement over a particular policy direction, you will never hear me refer to OUR President in nasty and hateful tones during a time of war nor march in some sort of protest that only serves to undermine our troops. PUT THAT IN THE BANK my friend.

[flashback]

Ah. Perhaps you weren't aware that AFP stands for Agence Française de Presse.

I'm glad to hear it. I'm as sick of the partisan crap as anyone. I still remember when the Supreme Court decision came down and Bush officially became the President-elect. I looked at my wife, shrugged my shoulders and said "Maybe he won't be so bad."

Boy was I wrong!

Just kidding. Seriously, I hope the Congress at least can get past the hardcore partisanship and geniunely represent the interests of the American people after Election Day, no matter who wins.

[Stu]

Originally posted by flashback Ah. Perhaps you weren't aware that AFP stands for Agence Française de Presse.

I had no idea they were French. Damn Frogs are everywhere.

[chomerics]

Originally posted by flashback

Just kidding. Seriously, I hope the Congress at least can get past the hardcore partisanship and geniunely represent the interests of the American people after Election Day, no matter who wins.

We need to unite as a country, and Kerry is the man who will LEAD us towards unification. The democratic party is no longer the party of the tax and spend ideology, it is the party which will balance our budget and lead us into the 21st century. In Kerry's speech the other night, he told America exactly what they needed to hear. . . It's up to us to put him in.

Partisainship should go out the window, it's the best path for the country and the world for that matter, to prosper. When we can finally eliminate political ideologies, we will truly be able to grow as a species.