US factory orders up, excluding autos, planes
Slowly, the US economy is showing signs that is it moving out of recession and into a phase that's stable, if not terribly exciting. A real recovery remains some time off.
The latest indication comes from America's factories. From May to June, they saw a solid 1.1 percent rise in new orders for durable goods like air conditioners and refrigerators (excluding transportation goods like autos), according to a Commerce Department report released Wednesday. That was the second monthly rise in a row and the highest total since February but far below the levels of 2005 to 2008.
What that means is that as far as much of US manufacturing is concerned, 2009 is starting to look a lot like late 2003 and early 2004. The robust growth of the intervening years have been erased.
That picture looks worse if you include the volatile transportation sector. The Chrysler and General Motors bankruptcies, other auto-plant closings, and a 39 percent drop in nondefense aircraft and parts (after a very strong May) pushed down the overall level of orders in June by 2.5 percent. But those onetime events are skewing the underlying stabilizing trend, economists say.
Companies are ratcheting down their operations and their inventories to be able to turn a profit in this new, downshifted economy.
"Overall, this report adds to the evidence that the recession is over, or close to over," wrote Paul Ashworth, a senior economist at Capital Economics, in an analysis. "But there is still little evidence of any meaningful recovery."
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