Durable-goods orders climbed 1%
Wells Fargo Securities says new orders slowing
Tom Stundza -- Purchasing, 10/28/2009 3:42:33 PM
Orders for durable goods at U.S. manufacturers regained some lost ground in September after sliding in August, but Wells Fargo Securities suggests new orders in the pipeline are slowing.
Orders to U.S. factories for big-ticket manufactured goods rose 1% in September as the strongest demand for machinery in 18 months offset continued weakness in commercial aircraft and renewed weakness in autos. Excluding transportation, the Commerce Department says orders rose 0.9%. This activity followed a 2.6% decline in August and is a hopeful sign for the manufacturing sector, writes Tim Quinlan, economic analyst at Wells Fargo. But, even he admits that other economists might be correct that demand could falter in the months ahead as various government stimulus programs wind down.
There really isn't a clear picture of whether the manufacturing will remain intact in the fourth quarter or will show a loss of steam, writes Quinlan. One clear negative indicator is that inventories fell again in September, marking the ninth consecutive monthly drop as manufacturers are apparently drawing down stockpiles to be as lean as possible. Atop that, unfilled durable goods orders have fallen for 12 consecutive months, the longest losing streak on record, showing that customers aren't sure where the industrial economy is headed.
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