New Data Shows Economy Losing Steam : Indicators: Factory orders rose in September, but at only half their pace of the previous month.
Strong demand for commercial aircraft pushed factory orders higher in September, the Commerce Department said Thursday, though they grew at only half the rate recorded in August.
The report added to signs that the manufacturing economy is slowing under the weight of bulging supplies of goods and amid caution ahead of this year’s holiday shopping season.
That and other reports suggest the economy has lost some steam in recent weeks after growing at a robust 4.2% annual rate during the third quarter this year.
September orders increased 1.5% to a seasonally adjusted $306.5 billion, compared to a revised 2.7% gain in August.
The figure was heavily influenced by aircraft orders, which are received infrequently and cost millions of dollars. Excluding the transportation category, which includes aircraft and parts, orders increased only 0.2% after a 0.9% rise in August.
In another worrisome sign, inventories mounted in September for a 12th consecutive month.
“The manufacturing sector is still struggling to come out of this inventory correction,” said Astrid Adolfson, an economist with MCM MoneyWatch in New York. “As long as they’re struggling, they’re likely to choose to extend their workweeks when they need to and to be cautious about hiring.”
Underlining that trend, the Labor Department reported separately that the number of workers applying for state unemployment benefits climbed by 6,000 last week.
New claims filed for unemployment pay during the week ended Oct. 28 rose to a seasonally adjusted 365,000--the highest in six weeks and well above the 356,000 level that Wall Street economists had forecast.
In another sign that job prospects were becoming scarcer in early fall, the Conference Board, a business research group, said its index of help-wanted ads dipped in September from August.
“After rising through the spring and early summer, want-ad volume has softened,” Conference Board economist Ken Goldstein said.
The Commerce Department report shows that durable goods orders, which account for more than half of total factory business, rose 3% in September to $168.9 billion. Orders for non-durable items such as food, clothing and paper products weakened a slight 0.1% to $137.6 billion in September.
Transportation equipment orders posted the largest increase, rising 10.6% after a 17.6% jump in August. Shipments of motor vehicles and parts rose only 3.1% in September after a 16.5% August increase.
In the automobile industry, shipments correspond to orders.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Total new orders in billions of dollars, seasonally adjusted:
Sept. 1995: $306.5
Source Commerce Department