Business
See other Business Articles
Title: U.S. Factory Output, Home Starts Exceed Forecasts in Sign Recovery Intact
Source:
Bloomberg
URL Source: http://www.bloomberg.com/apps/news? ... 0601087&sid=aTp1GdJiKNZ8&pos=1
Published: Feb 17, 2010
Author: By Bob Willis and Timothy R. Homan
Post Date: 2010-02-17 12:04:19 by Brian S
Keywords: None
Views: 476
Comments: 2
Feb. 17 (Bloomberg) -- Industrial production in the U.S. rose more than anticipated in January as factories churned out more consumer goods and business equipment, leading the recovery of the world’s biggest economy. The 0.9 percent increase in production at factories, mines and utilities followed a 0.7 percent gain the prior month, according to the Federal Reserve in Washington. Figures from the Commerce Department today showed housing starts climbed to a 591,000 annual pace, exceeding the median forecast in a Bloomberg News survey. Stocks advanced on the reports and after Deere & Co., the world’s largest maker of farm machinery, signaled investment in new equipment will probably be sustained in coming months. Growing overseas demand and efforts to replenish inventories in the U.S. will keep spurring production and may generate the jobs needed to boost consumer spending. “Foreign demand growth continues to be very strong, particularly from Asia, and we’re starting to see capital spending pick up,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York, who correctly forecast the gain in production. “The recovery looks intact.” Economists forecast a 0.7 percent gain in production after a previously reported 0.6 percent rise in December, according to the median of 78 projections in a Bloomberg survey. Estimates ranged from gains of 0.3 percent to 1.4 percent. The Commerce Department said housing starts increased 2.8 percent in January after dropping 0.7 percent. The annual rate was faster than the median forecast in a Bloomberg survey for a 580,000 pace. Construction of single-family houses rose 1.5 percent, while work on multifamily homes such as townhouses and apartment buildings jumped 9.2 percent. Stocks Gain The Standard & Poor’s 500 Index climbed 0.2 percent to 1,097.54 at 11:22 a.m. in New York. Treasuries fell, pushing the yield on the 10-year note up four basis points to 3.7 percent. A basis point is 0.01 percentage point. Part of the January increase may have reflected warmer weather, compared with the monthly average and colder-than- average temperatures in December. The previous month was the 14th coldest December and the 11th wettest in 115 years of record-keeping, according to the National Climatic Data Center in Asheville, North Carolina. Home construction may have been limited in February after blizzards whipped through the East Coast and snowstorms moved through Texas, Mississippi and other states in the southern U.S. The Fed’s report also showed capacity utilization, which measures the proportion of plants in use, increased to 72.6 percent from 71.9 percent. The plant-use rate averaged 80 percent over the past two decades and reached a record low 68.3 percent in June. Business Equipment Production of business equipment increased 0.9 percent as demand for computers, communications gear, semiconductors and electronic equipment rose. Output of consumer goods rose 1.1 percent, and construction supplies increased 1 percent. “This information points to another double-digit increase in capital spending this quarter after what was a solid 13 percent annualized increase in the fourth quarter,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. said in an e-mail to clients. The pace of investment in equipment and software from October through December was the fastest since 2006 and helped the economy expand 5.7 percent, Commerce Department figures showed Jan. 29. Moline, Illinois-based Deere said today that fiscal 2010 equipment sales will increase instead of decline. Deere now predicts an increase of 6 percent to 8 percent, compared with a November forecast of a decline of about 1 percent. Beats Estimates Deere reported fiscal first-quarter profits that topped analysts’ estimates and raised its 2010 forecast. The Fed’s report also showed utility output rose 0.7 percent. Mining, which includes oil drilling, increased 0.7 percent. Motor vehicle and parts production rose 4.9 percent following a 0.3 percent decline the prior month. Automakers are boosting production to rebuild depleted inventories, according to Rebecca Lindland, director of auto research at IHS Global Insight in Lexington, Massachusetts. Ford Motor Co., the only major U.S. automaker to avoid bankruptcy, plans to boost first-quarter North American production by 58 percent from a year earlier to 550,000 vehicles. Eaton Corp., the maker of hydraulics and automotive valves, is seeing demand increase in its auto and trucks unit, as is typical early in an economic cycle, Chief Executive Officer Sandy Cutler said last week in an interview from company headquarters in Cleveland. ISM Survey Private surveys have also signaled manufacturing is recovering. The Institute for Supply Management’s factory index on Feb. 1 showed the fastest pace of expansion in January since 2004. A separate report from the Labor Department showed prices of goods imported into the U.S. rose 1.4 percent in January, reflecting in part a jump in the cost of petroleum.
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Brian S (#0)
Restocking shouldn't be confused with 'recovery'.
my anti groupie can't get through life without me.
You're stocked [snicker] full of an unusual amount of stupidity today.
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace
#2. To: Badeye (#1)
(Edited)
Restocking shouldn't be confused with 'recovery'.
Top • Page Up • Full Thread • Page Down • Bottom/Latest
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]