Orders for big ticket manufactured goods ticks up just 0.4%
September 25, 2020 by Martin Crutsinger, The Associated Press
WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods increased just 0.4 per cent in August following a much larger gain in the previous month.
It was the fourth consecutive monthly increase, but the most recent uptick was far weaker than the 11.7 per cent surge in July, the Commerce Department reported Friday.
Economists had expected production to ease somewhat after manufacturers rebounded strongly in previous months from COVID-19 related shutdowns, but the growth in August was less than half what economists had projected.
A key category that tracks business investment plans rose 1.8% in August, compared with gains of 2.5 per cent in July and 4.3 per cent in June.
Economists appear divided over how to interpret the data. Some saw the string of positive numbers as a hopeful sign of a strong bounce back. Others, however, believe the modest advance overall signals that manufacturing appears paced for a slow recovery now that an initial boost from re-openings and government aid has faded.
“We’re now in Phase 2 of this recovery, in which the economy will face persistent headwinds of the COVID-19 crisis without the support of meaningful fiscal stimulus and as a vaccine still remains absent,” said Oren Klachkin, lead U.S. economist at Oxford Economics.
The report showed that the volatile transportation sector rose a modest 0.5 per cent as orders for motor vehicles and parts fell four per cent, after a 21.7 per cent surge in July as auto plants reopened.
Excluding transportation, orders would have risen 0.4 per cent.
The changes left total orders at a seasonally adjusted $232.8 billion in August.