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US: Factory orders in line with durables
Thu, Sep 4 2008, 07:27 GMT
by KBC Market Research Desk
Factory orders rose 1.3% M/M in July, slightly above the consensus of 1.0% M/M, after rising an upwardly revised 2.1% M/M in June, earlier reported as 1.7% M/M. Excluding transportation, new orders rose a more modest 1.3% M/M, which is clearly below the June figure of 2.7% M/M. Machinery (4.1% M/M from 2.6% M/M) and transportation (3.2% M/M from -1.8% M/M) showed an improvement, while electrical equipment (-5.9% M/M from 5.0% M/M) worsened. These figures are exactly in line with the durable goods orders, released last week. Factory shipments were up 2.1% M/M following a 1.9% M/M rise in June. Non-defence capital goods shipments less aircraft were up 1.6% M/M following a 0.6% M/M increase in June and suggesting that Q3 business investment will be quite strong in Q3, following a decline in Q2. The inventory-to-sales ratio dropped to 1.20 from 1.22 previously and from the peak of 1.26 in February/March. We would qualify the report as strong, but want to see confirmation in the next months given the volatility of the results.
August car sales surprised on the upside, apparently helped by extra incentive programmes and lower gasoline. Domestic sales totalled 10.4 million annual rate, up from 9.1 million in July, which was the lowest in 17 years. Curiously, light trucks rose the strongest.
EMU: Weak retail sales raise fears for further slowdown in Q3
The preliminary Q2 GDP report showed a change in GDP from 1.5% Y/Y to 1.4% Y/Y, while the quarterly figure remained unchanged at -0.2% Q/Q. Looking at the details, investment deteriorated sharply from 1.5% Q/Q to -1.2% Q/Q, but also household consumption weakened (-0.2% Q/Q from 0.0% Q/Q) and both imports and exports contracted.
EMU Retail sales, which is a first pointer of household consumption in Q3, slowed a more than expected 2.8% Y/Y and 0.4% M/M in July, while the June figures were downwardly revised from -0.6% M/M to -0.9% M/M and from -3.1% Y/Y to -3.2% Y/Y. The first breakdown of Q2 GDP showed a very weak picture of the EMU economy and the slowing July retail sales raise fears that household consumption will shrink again in the third quarter of 2008.
Other: UK services PMI contracts at slower pace
In the UK, services PMI unexpectedly rebounded in August (from 47.4 to 49.2), while a slight decline was expected. Employment (47.9 from 46.6), new business (47.1 from 44.7) and business expectations (61.0 from 56.1) showed an improvement, while outstanding business fell slightly (44.1 from 44.5). Looking at prices, both prices charged and input prices fell for the second time in a row, indicating that the peak in inflation might be over. The services sector contracted for the fourth consecutive month in August, but the underlying picture became less negative, which might raise expectations that in September services PMI will come out above the benchmark level of 50.
Published on Thu, Sep 4 2008, 07:32 GMT
Archive
- US: manufacturing ISM shows deepening recession
Published On Tue, Dec 2 2008, 08:30 GMT - EMU: CPI inflation falls sharply in November
Published On Mon, Dec 1 2008, 08:15 GMT - EMU: Economic sentiment falls to 16-year low
Published On Fri, Nov 28 2008, 08:39 GMT - US: durables show that firms are slashing sales
Published On Thu, Nov 27 2008, 08:30 GMT - US: Third quarter GDP contracts by 0.5%
Published On Wed, Nov 26 2008, 08:48 GMT
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