Factory Slowdown Shows U.S. Has Little Traction

By Ray Pinard | November 8, 2013

Here’s an interesting article by Jeanna Smialek & Lorraine Woellert, originally published by Bloomberg, and reprinted on the Friends of the U.S. Chamber of Commere website.

Factory output rose less than forecast in September and contract signings for U.S. home purchases fell the most in three years, showing the economy was having trouble gaining traction before the government shutdown.

The 0.1 percent advance in manufacturing followed a revised 0.5 percent gain in August that was smaller than initially estimated, figures from the Federal Reserve showed today in Washington. Pending sales of previously owned homes slumped 5.6 percent in September, the fourth straight month of declines, the National Association of Realtors reported.

“The economy is in a shutdown-related soft patch in the fourth quarter,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, who correctly predicted a 0.6 percent gain in total industrial production, which also includes mines and utilities. “Everyone started to be a little more cautious in September.”

Advances in housing and manufacturing would help generate the employment gains sought by Fed policy makers, who begin a two-day meeting tomorrow. A pickup in consumer and business sentiment depends in part on how companies and households respond to an agreement by lawmakers that funds the government into early next year.

Read more