American economy worsens
Source: Agencies |
July 29, 2011, Friday
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Print Edition
Print Edition
THE economy worsened in much of the United States earlier this summer, hampered by high unemployment, weak home sales and signs of a slowdown in manufacturing.
A survey by the Federal Reserve, released on Wednesday, found that weak consumer spending, slow job growth and tight credit are restraining growth going into the second half of the year.
Growth slowed in eight of the Fed's 12 bank regions in June and early July, the report found, compared with the spring. That marked the worst showing this year.
The Fed's survey found factory output weakened in some areas, which is likely to raise concerns that manufacturing, one of the economy's few bright spots in the past two years, is sputtering.
Further such evidence came in a separate report Wednesday from the Commerce Department, which found that businesses reduced orders for airplanes, autos, heavy machinery and other long-lasting manufactured goods in June.
Orders for durable goods fell 2.1 percent, the department said. It was the second drop in three months. The decline was driven by a big drop in orders for commercial aircraft. Orders for autos, auto parts and computers also fell. And a key category that tracks business investment plans dropped 0.4 percent.
The Fed's report found the job market remained weak in most of the 12 districts. Hiring was scant, for example, in the Boston district, except among advertising and consulting firms.
Consumer spending improved, aided by a drop in gas prices, which had peaked at nearly US$4 a gallon in early May. But auto sales dropped. Supplies at many dealers remained tight because of disruptions stemming from Japan's March 11 earthquake.
The overall dim picture of the national economy echoes recent data on hiring and manufacturing. Economists expect growth for the April-June quarter, which will be reported today, will be only 1.7 percent, the second straight quarter of anemic expansion.
In June, employers added only 18,000 jobs, the fewest in nine months. And the unemployment rate rose to a one-year high of 9.2 percent,.
The report is based on anecdotal information gathered by officials at the 12 Fed regional banks.
A survey by the Federal Reserve, released on Wednesday, found that weak consumer spending, slow job growth and tight credit are restraining growth going into the second half of the year.
Growth slowed in eight of the Fed's 12 bank regions in June and early July, the report found, compared with the spring. That marked the worst showing this year.
The Fed's survey found factory output weakened in some areas, which is likely to raise concerns that manufacturing, one of the economy's few bright spots in the past two years, is sputtering.
Further such evidence came in a separate report Wednesday from the Commerce Department, which found that businesses reduced orders for airplanes, autos, heavy machinery and other long-lasting manufactured goods in June.
Orders for durable goods fell 2.1 percent, the department said. It was the second drop in three months. The decline was driven by a big drop in orders for commercial aircraft. Orders for autos, auto parts and computers also fell. And a key category that tracks business investment plans dropped 0.4 percent.
The Fed's report found the job market remained weak in most of the 12 districts. Hiring was scant, for example, in the Boston district, except among advertising and consulting firms.
Consumer spending improved, aided by a drop in gas prices, which had peaked at nearly US$4 a gallon in early May. But auto sales dropped. Supplies at many dealers remained tight because of disruptions stemming from Japan's March 11 earthquake.
The overall dim picture of the national economy echoes recent data on hiring and manufacturing. Economists expect growth for the April-June quarter, which will be reported today, will be only 1.7 percent, the second straight quarter of anemic expansion.
In June, employers added only 18,000 jobs, the fewest in nine months. And the unemployment rate rose to a one-year high of 9.2 percent,.
The report is based on anecdotal information gathered by officials at the 12 Fed regional banks.
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