Posted on 11/04/2002 5:27:17 PM PST by Red Jones
Factory Orders Continue to Decline
By JEANNINE AVERSA, Associated Press Writer
WASHINGTON (AP) - Orders to U.S. factories fell for a second straight month in September. It was another setback for manufacturing, which has seen almost 2 million jobs evaporate over the last two years and is struggling not to sink even deeper into the quicksand of economic uncertainties.
The Commerce Department (news - web sites) reported Monday that factory orders declined by 2.3 percent in September, after a 0.4 percent drop in August. September's decline marked the third decrease in the past four months.
"With consumer demand softening of late, businesses remain very cautious about levels of new orders and production," said Susan Polatz, economist with Banc of America Securities.
While September's performance was better than the 3 percent decline analysts had predicted, more forward-looking data suggest a somber outlook for manufacturing.
The Institute for Supply Management reported Friday that manufacturing activity shrank in October, the second monthly drop in a row.
On the same day, the government reported that 49,000 factory jobs were lost in October, marking the 27th straight month in which manufacturing jobs were eliminated. Job losses during that period came to nearly 2 million.
"Clearly, manufacturing is suffering," said economist Clifford Waldman of Waldman Associates. "Manufacturing has lapsed from a moderate growth path into a modest recession."
Hardest hit by last year's recession, manufacturing has been the weakest link for the sputtering national economic recovery, which many analysts say is losing momentum in the current October-December quarter.
The economy, powered by consumer spending, especially on cars and other big-ticket goods, rebounded in the summer, growing at a rate of 3.1 percent. But many analysts worry that the summer boom foreshadowed a winter lull.
Pessimistic economists believe the economy will grow at around a 1 percent pace in the October-December quarter as consumers tighten their belts, worried about the economy's direction and a possible war with Iraq. The wobbly economy will be weighing on voters' minds when they vote in midterm elections Tuesday.
Growing numbers of economists believe the Federal Reserve (news - web sites) may cut short-term interest rates for the first time this year at its next meeting Wednesday. If not, analysts say a rate cut would be likely in December.
Wall Street has rallied in recent days on rising hopes of a rate cut. The Dow Jones industrial average rose another 53.96 points on Monday to close at 8,571.60.
Rates have been at four-decade lows all year long. By keeping rates low or possibly nudging them down, Fed policy-makers hope to motivate consumers and businesses to spend and invest more, helping to boost economic growth.
Consumers, whose spending accounts for two-thirds of all economic activity in the United States, have been the main force keeping the economy going this year. Some analysts worry that they might be getting tired.
Low interest rates and extra cash from a boom in mortgage refinancing have helped support consumer spending this year. On the other hand, negative factors, including the stagnant job market, eroding consumer confidence and the turbulent stock market, seem to be making consumers more cautious, analysts say.
Businesses, meanwhile, have yet to see their profits fully recover from last year's recession. Because of that, they have been reluctant to make big commitments to hiring and investment, factors restraining the recovery.
Virtually all the weakness in September's factory orders reflected slackened demand for durable goods, big-ticket items expected to last at least three years. Those orders fell by 4.9 percent, after a 1.1 percent drop in August.
Primary metals, machinery, commercial airplanes and parts were among areas posting losses in September. Those losses swamped gains elsewhere, including orders for cars, computers and household appliances.
For nondurable goods, such as food and clothes, orders to factories rose by 0.9 percent in September, down from a 0.5 percent increase in August.
Probably. Lots of robotics I'd assume.
"Not everyone out there can afford an ivy league degree."
Myself included.
"Not everyone out there has the desire to work in a cubicle and make a tall stack of paper shorter at the end of the day."
I sense a problem in your reasoning. How bad can it be if people are basing their employment decisions on what they "desire" to do? Sounds like a dreamworld to me. Adapt and make the best of it. Repeat. Never stop working on the future and always pray for good health. Imo, that's the Good Life, not the crap they spamm via the media about disposable income and leisure. If I had enemies....
"What about the tens of thousands of kids who graduate from H.S. each year and maybe are not that skilled to get a "hi-tech" job or a job in telecommunications."
Easy answer: Join the military. If they're intelligent and non-psychotic they'll have their pick of career opportunities. They'll be tested on the way in for their aptitudes and the skills they acquire will guide them throughout their military career. Should they be injured while in service their health, skills, knowledge and aptitudes will be reevaluated and they'll receive Vocational Rehabilitation. That's my story.
" I know of several young guys that prefer "working with their hands" and like to see something in the physical realm for their 8 hours work at the end of the day.
See above! -although special terms and conditions apply.
" Since 9 out of 10 mom and pop machine shops and tool making shops have been put out of business in the NE in the last 15 years, these kids have no secure jobs to step into."
You mean no secure manufacturing job. BFD, sounds like a pipe dream anyways. Like getting paid 70K to pick cotton or work in a textile mill. Reality is always different. Don't be cruel and torture the young ones with BS expectations or promises.
"The few tool making jobs that are around pay VERY good, good enough for mommy to stay home with the kids if she so chooses.
Sounds like a long-term contract, i.e., for the government. I wouldn't count those jobs as being 'secure' much longer. You can't base reality for the young folks on some leftover plumb job from a outdated economic model. That's the stuff heartaches are made of.
"My friends in the few remaining tool shops are pulling down 70,000 or more a year.....not bad for working in a quiet, well lit, air conditioned shopas well as not having a degree."
You said it: "not bad". True, not bad at all -because it's extraordinary! And I'd bet the reason the company can pay that much is because no one else can do what they do with their hi-tech machine equipment. I.e., innovation. They'll have to stay on the cutting-edge too or else their products and the wages become impractical. The workers will then suffer pay cuts, lose their jobs and the company will go out of businesss. I'm sure you're familiar with that.
"One problem with your statement is this: What exactly have we transitioned to?
Good question. I think we're still transitioning and it's an information and global financial management economy.
"Ask the .commers how secure their jobs are. They're all working three Mcjobs now to survive.
Not really. If they're doing that they're probably retraining at the same time. If they're not retraining they were never suited for IT in the first place. I spent 18 months studying and taking certifications before getting my current job. As I'm now getting up to speed in this job I'm prepping for the next one.
"It really sucks NOT having a manufacturing base to fall back on."
True. There's a base, it's just not that big and very dynamic. It also sucks not having an agricultural base to fall back on. Like a 100 years ago how children would go pick crops several months out of the year instead of attending school so they could help their family eat. Wooo hoooo, those were the days.... And it all went to hell with those darn machines.
"Don't take this personally, but you're statements are not based on reality."
Actually, they're based upon my own life. If it seems "unreal" to you well yeah, because: "Wooo hooo these are the days!
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He may have done so. However, this is not group therapy. Admissions and catharsis are not sufficient. What I want is serious analysis of cause, effect, and cure. That's what I'm not getting from Bush.
Just imagine what would happen if a couple of those countries decide to impose an embargo/sanctions on America for a few months or so.
It took many centuries because Rome took care to have th strongest military whcih forced the "allies" and subjects to pay the tribute for "the common defence" ie for the support of bread and circus(welfare) for the Roman citizens. The things started to fall apart when the army got outsourced to the foreigners (including unreliable barbarians).
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Forty years ago it would have made no difference. We would have simply purchased from domestic sources what we had been arbitrarily been buying from foreign sources. Now we are becoming dependent upon foreign sources for everything from semiconductors to machinery while some goofs talk about gladly leaving the former economies to machines and the Chinese. .
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1993 was a horrible time. Enormous numbers of people had been out of work for three months or more, or six months or more. They were losing their homes and retirement. I was lucky to be working then. Millions of others were not.
Please note, the President is NOT saying that the economy is strong but the foundation is strong. A strong foundation means recovery/repair is possible. If the foundation is not strong, might as well tear it down. Do you think we're ready to tear down?
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You are one small person in a land of nearly 300,000,000 people. There are other things to consider byond just you at the moment.
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I'm not a blind conformist. I can't be ruled by what other people think or don't think. I still haven't heard an analysis from Bush. That's what counts.
The best and only economic analysis I have heard was from Perot more than 10 years ago. Everything he predicted has come to pass.
Things seem to happen faster now than in the days of Rome. And we don't get tribute from anyone.
They don't want it pinned on them, but they deserve it none the less. I would imagine that anyone who knows union workers intimately enough that such information would be shared has been told stories about guys sleeping on the job, ripping off supplies and all kinds of nonsense. Indeed, unions were a necessity when they started, but they are hurting themselves more than they are helping these days.
Well, America was suffering some economic problems then, yes, but we recovered nicely. We will again. The sky is not falling. :)
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