Goods orders rise fails to curb recession fears
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Thursday 25 August 2011
Orders for durable goods, long-lasting products like factory equipment and computers, rose in the US last month by more than economists had expected, data showed yesterday.
The figures were not robust enough, however, to allay all fears of a double-dip recession, and there were continuing calls for the Federal Reserve's chairman, Ben Bernanke, to announce more monetary stimulus at the Fed's annual policy symposium in Jackson Hole tomorrow.
"Markets are positioned for an epic beating if Mr Bernanke fails to come through," John Lonski, the chief US economist at Moody's said. Durable goods orders rose at an annualised rate of 4.0 per cent in July, after a 1.3 per cent drop in June.
A jump in orders for aircraft and cars – which were disrupted after Japan's earthquake – accounted for most of the rise. Stripping these out, the figures showed an unexpected 0.7 per cent rise in July, when a fall had been expected. Durable goods orders reflect businesses' confidence in the future.
"July's durable goods orders data are not good as they might look," Paul Dales, at Capital Economics, said. "Nonetheless, they still suggest that business investment may accelerate in the third quarter. This supports our view that third-quarter GDP growth won't be a complete write-off."
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