".....Doom-&-gloom Demoncrats & their BS Liberal Media Wonks.." are wrong again..!!! .....As usual...!!!
Factories Speed Ahead, Consumers Spend Wed Dec 1, 2004 03:55 PM ET By Pedro Nicolaci da Costa
NEW YORK (Reuters) - The outlook for U.S. manufacturing improved in November as factories hired more workers in response to a jump in new orders, a national survey published on Wednesday showed.
Coupled with news of a solid start to fourth-quarter consumer spending, the data suggested the economy will sustain the reasonable growth levels seen in recent months.
"We are seeing a renewal of vigor in the factory sector, as industrial production picked up sharply in October, new orders and shipments of capital goods have been rising lately, and we may have a return to net hiring in November," said Stephen Stanley, chief economist at RBS Greenwich.
Still, an easing of promotional incentives in the auto industry took a toll on car sales, which showed a second straight month of softness in November and indicated the sector would be a drag on fourth-quarter consumption.
Nevertheless, the robust overall tone to the figures reinforced investor expectations that the Federal Reserve would continue raising interest rates well into 2005.
Manufacturers were certainly doing their bit for the economy, with the Institute for Supply Management's national factory index climbing to 57.8 from 56.8 in October.
A reading above 50 in the ISM index indicates growth in the factory sector, which represents about one-sixth of the $10.9 trillion U.S. economy. November marked 18 months of expansion in manufacturing.
But car sales last month were weaker than analysts had predicted, with the tally so far amounting to 12.9 million North-American made vehicles. That was down from an already subpar 13.15 million in October.
While shunning autos, consumers contributed to growth in other ways, as evidenced by a 0.7 percent increase in spending during October. That spike offset worries about lackluster retail sales over the Thanksgiving weekend, a key marker of holiday shopping trends.
But spending, too, had its downside.
"The result of this increase in consumption on the back of growth in income is that the savings rate fell to 0.2 percent," noted Drew Matus, U.S. financial markets economist at Lehman Brothers. Continued ...
reuters.com
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