U.S. factory orders in
September fell for the third time in the last four months as weak
demand and a struggling economic recovery restrain manufacturing.
Companies are reluctant to boost orders until consumer and
business spending strengthen, economists said. Federal Reserve
policy makers may offer aid to the economy by lowering their
benchmark interest rate when they meet Wednesday.
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“Demand is weak, business profits aren’t good and companies
are being very cautious,” said Kevin Logan, chief market
economist at Dresdner Kleinwort Wasserstein Securities LLC in New
York. “I expect the economy to be very weak for the next several
quarters.”
Factory orders decreased 2.3 percent, reflecting fewer
bookings for commercial aircraft, machinery and communications
equipment, the Commerce Department said. In August, bookings fell
0.4 percent. Airplane parts maker Goodrich Corp. said last month
that reduced air travel this year has caused profits to fall.
The economy is probably growing at a 2.2 percent annual rate
this quarter, slower than the 3.1 percent pace of the previous
three months, according to last month’s consensus estimate of
economists surveyed by Blue Chip Economic Indicators. Companies
are hesitant to hire until the economy shows signs of improving.
U.S. employers announced plans in October to eliminate
176,010 positions, according to the placement firm Challenger,
Gray & Christmas Inc. That’s more than double the number in
September and the most since January, when companies announced
they were cutting 212,704 jobs.
Bloomberg News
