Last updateFri, 28 Oct 2016 6pm


U.S. Durable Goods Orders Fell 0.1% in September

New orders for manufactured durable goods in September decreased $0.3 billion or 0.1% to $227.3 billion, the Department of Commerce announced. This decrease, down following two consecutive monthly increases, followed a 0.3% August increase. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders increased 0.7%.

Inventories of manufactured durable goods in September, up three consecutive months, increased $0.5 billion or 0.1% to $384.0 billion. This followed a 0.1% August increase. 

U.S. Economy Grew 2.9% in the Third Quarter

Real GDP in the U.S. increased at an annual rate of 2.9% in the third quarter of 2016, according to the advance estimate released today by the Department of Commerce. This is the highest figure in two years and slightly better than economists had predicted. In the second quarter, real GDP increased 1.4%.

This increase in the third quarter reflected positive contributions from personal consumption expenditures, exports, private inventory investment, federal government spending and nonresidential fixed investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. 

Richmond Fed: Manufacturing Rises But Remains Sluggish

Manufacturing activity fifth district (MD, DC, VA, WV, NC, SC) remained sluggish in October, according to the most recent survey by the Federal Reserve Bank of Richmond. New orders and backlogs decreased this month, while shipments flattened. Hiring activity strengthened mildly across firms and wage increases were more widespread. Prices of raw materials and finished goods rose more quickly in October, compared to last month.

Firms looked for better business conditions during the next six months. Manufacturers expected positive growth in shipments and in the volume of new orders. In addition, manufacturers looked for rising backlogs of new orders. Producers anticipated increased capacity utilization and looked for slightly longer vendor lead times. 

Consumer Confidence Retreated in October

The Conference Board Consumer Confidence Index, which had increased in September, declined in October. The index now stands at 98.6, down from 103.5 in September. The present situation index decreased from 127.9 to 120.6, while the expectations index declined from 87.2 last month to 83.9.

“Consumer confidence retreated in October, after back-to-back monthly gains,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.” 

BCG: Technology Matters to Economic Growth

Despite its starring role in business and everyday life, many economists openly question whether technology is visible in traditional economic metrics such as GDP, productivity, and corporate profits.

The Boston Consulting Group (BCG) shows that, on the contrary, declines in technology investment are followed by startling drops in all these measures of economic growth. Whenever companies cut back on technology spending in order to shore up profits—as companies in many industries are doing now—profits plunge. GDP also falls dramatically. Within a few years, labor productivity across the economy falls, as well. 


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