Manufacturing, Other Economic Data Expected

This week, investors face a slew of economic data that are likely to show that U.S. manufacturing is limping along because consumers are cautious about spending and that businesses are reluctant to buy equipment or add much to inventories until the economy gathers steam.

A report Thursday from the Federal Reserve is expected to show that industrial production rose 0.1% in September after falling 0.3% a month earlier.

“There is little reason to expect an upturn in business conditions until well into 2003,” said Chris Rupkey, senior economist at Bank of Tokyo-Mitsubishi Ltd. in New York. “The economic picture will not brighten until manufacturing gets back on firmer ground.”

Companies are reluctant to build inventories or order more from manufacturers until the recovery picks up strength. The Commerce Department is expected to report on Tuesday that business inventories rose 0.2% during August, half of the July increase.

The Labor Department is expected to report on Friday that the consumer price index rose 0.2% in September compared with a 0.3% rise a month earlier. Excluding the volatile components of food and energy, the index probably increased 0.2%.

Meanwhile, the nation’s home builders remained busy a month after a record pace of new-home sales, Commerce Department figures probably will show Thursday. About 1.64 million homes probably were started in September, up from 1.61 million a month earlier.

On Friday, the Commerce Department probably will report that the trade deficit widened in August to $35.5 billion from $34.6 billion.