July Factory Orders Disappoint As Productivity Rises
Orders to U.S. factories rose 1.3 percent in July, the Commerce Department said moments ago, missing expectations.
Also today, the Labor Department said that second-quarter revised productivity rose at a revised rate of 6.6 percent, which means that people who still have their jobs are working harder and hours worked are still being cut.
Forecasters had expected factory orders to jump 2 to 2.5 percent. Some of the wilder estimates had it rising as much as 4.5 percent.
Still, the number represents some incremental gain. June factory orders rose .9 percent.
The factory orders tell the story of inventory held by U.S. businesses. During the worst of this recession, businesses cut off orders to factories and worked hard to burn down their inventory. (Sometimes, as with cash-for-clunkers, they got taxpayer help reducing their inventory.)
During that time, factory orders plummeted and no one was ordering anything new to sell.
But as the recession eases, and consumer confidence starts to creep back (a bit, in fits and starts), businesses need to replenish their inventories, so factory orders start to rise again.
With productivity, this is the result of an economy that's lost some 6 million jobs during this recession. Output rose in the second quarter, Labor said today, even as hours fell, meaning workers are pedaling faster. You might not think seeing your colleagues laid off left and right around you would motivate you to work more and better, but evidently that's true. (Note to H.R.: Please do not take this as an object lesson.)
-- Frank Ahrens
Sign up to get The Ticker on Twitter
September 2, 2009; 10:04 AM ET
Categories: The Ticker | Tags: Commerce Department, factory orders
Save & Share: Previous: Markets Flat at Opening
Next: Will Whole Foods Boycott Work?
Posted by: mibrooks27 | September 2, 2009 1:49 PM | Report abuse
The comments to this entry are closed.