Everyday emerging new evidence comes out that confirms what technical analysis already telegraphed at the reversal off THE BOTTOM way back on September 21, 2002:
Chicago Purchasers Index Surges to 53.1, First Time Above 50 in 19 Months
Chicago, Feb. 28 (Bloomberg) -- Manufacturing in the Chicago area grew in February for the first time in 19 months, a survey of purchasing executives showed, suggesting the factory slowdown that helped drag the U.S. into recession may have ended.
The National Association of Purchasing Management-Chicago said its factory index rose to 53.1 this month from 45.1 in January. The jump was the largest in almost 14 years and the index hasn't been above 50, indicating that business expanded, since July 2000.
``Manufacturing has come back,'' said Astrid Adolfson, an economist at MCM MoneyWatch in New York. ``The recovery is now being led by the sector that took us down last year.''
The Treasury's 4 7/8 percent note that matures in February 2012 fell 3/16 point, pushing up its yield 2 basis points to 4.86 after the Chicago statistics and a separate report from the Commerce Department that the economy expanded in the final three months at a 1.4 percent annual rate. That was a revision from an earlier estimate the gross domestic product grew at a 0.2 percent pace.
Every component of the Chicago purchasers' survey showed improvement in February. The index of new orders rose to 59.5 -- the highest since April 2000 -- from 48.7 in January. The production index climbed to 55.6 from 50.4. A majority of purchasers reported paying higher prices this month for the first time since last June.
Analysts expected an increase in the overall index to 47.1, according to the median of 46 forecasts in a Bloomberg News survey. Investors watch the Chicago region's factories for clues about the direction of U.S. manufacturing and the national factory index published by the Institute for Supply Management.
National Index
The national report for February is scheduled for release tomorrow. Analysts expect it will show an increase to 51 from 49.9 in January, according to the median of 63 forecasts in a Bloomberg News survey.
The national index also uses a reading of 50 to mark the point between improving and declining business. As with the Chicago regional index, it hasn't been above that point since July 2000. A reading above 50 would dovetail with other reports that show the recession that began in March may be over soon.
Chicago-based Boeing Co., the world's biggest airplane maker, said orders rose in January to 104 from 41 bookings the previous month. General Motors Corp., which has suppliers in the Chicago area, boosted production plans to keep up with stronger-than- expected demand.
The Commerce Department this morning said the economy grew at a 1.4 percent annual rate in the final three months of last year. That's higher than the 0.2 percent gain the government estimated last month and follows a 1.3 percent decline in the third quarter. Consumers led the fourth-quarter gain by taking advantage of zero- percent financing offers from U.S. automakers. Government spending also increase more than any time since 1978.
Greenspan
``Increasing signs have emerged that some of the forces that have been restraining the economy over the past year are starting to diminish,'' Federal Reserve Chairman Alan Greenspan said yesterday.
Orders for durable goods rose 2 percent in January, the third gain in four months, as demand increased for autos, aircraft and computers.
The Chicago group's index measuring inventory levels rose to 37.5 from 32.7 in January. The region's manufacturers have been cutting inventories since March 2000.
The index of prices paid for raw materials rose to 51.2 from 40.7. The index had shown falling prices for eight consecutive months and the monthly increase was the biggest in 21 years.
The measure of supplier deliveries increased to 46.4 from 43.9. The measure of order backlogs rose to 50.1 from 43.4 last month, as some local companies began to report improving demand.
Lincolnshire, Illinois-based Fortune Brands Inc., the second largest U.S. cabinet maker, this week said it won a contract to manufacture Home Depot Inc.'s Thomasville line of cabinets.
Caterpillar
Peoria, Illinois-based Caterpillar Inc., the largest maker of heavy machinery, said first-quarter results will likely be ``a little better than anticipated,'' Barron's reported, citing Chairman and Chief Executive Officer Glen Barton.
Still, Chicago-area factories continued to cut jobs in December, as they worked to stay profitable in the face of a slowing economy. The employment index rose to 36.3 from 23.2 -- which was the lowest reading since 1946, when the survey began. According to the index, the job market for Chicago-area factory workers has been worsening since April 2000.
The Illinois jobless rate fell to 5.9 percent in January, from a six-year high of 6 percent in December, the Illinois Department of Employment Security said. The state's lost 39,000 factory jobs in the past year.
General Binding Corp., a Northbrook, Illinois-based maker of laminating and paper-shredding equipment, began firing about 400 workers, or 9 percent of its worldwide workforce, in the fourth quarter.
U.S. Can Corp., a maker of steel and plastic containers, said it's cutting 500 jobs and closing four manufacturing facilities to boost profit. The Lobard, Illinois-based company will consolidate two other plants into one.
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Best Regards, J.T. |
