US industry's worst slump since 1945

Click to follow
The Independent Online

The US is going through its worst industrial recession since the Second World War, official figures confirmed yesterday.

The output of American factories and utilities slumped by 1.0 per cent last month, worse than the contraction that had been forecast by economists. It was the 12th successive monthly decline, marking the longest period of uninterrupted contraction since a string of decreases running from November 1944 to October 1945.

The report is the latest to detail a long-running contraction in the manufacturing sector. The monthly index compiled by the National Association of Purchasing Management has stayed below its break-even mark of 50 since August 2000. Meanwhile 93,000 jobs were cut in the manufacturing sector in September.

Manufacturing activity, the largest portion of industrial production, fell 1.1 per cent in September after a 0.9 per cent decline in August, the Federal Reserve said. Carey Leahey, senior US economist at Deutsche Bank, said the production number was "really weak".

The figures came as the deputy head of the Fed, vice chairman Roger Ferguson, warned that he did not know when the recovery would start. "If the extent of the economic damage inflicted by the [11 September] attacks is unknown at this point, so too is the length of time before aggregate economic growth picks up," he said.

However, there was a glimmer of hope as chain store sales recovered slightly from the steep declines seen after theatrocities in the US.

Store sales were virtually flat in the week ended 13 October, compared with a 0.8 per cent drop one week earlier. However the index is still 3 per cent lower than it was before the attacks.