Plus: Asian Manufacturers Post Stronger Growth, European Recovery Remains Mixed, New Jobless Claims Drop and MORE.]]>
U.S. Trade Deficit Widens in September
The United States trade deficit widened by 18.2 percent in September, reaching $36.5 billion from $30.8 billion (revised) in August, the U.S. Department of Commerce said Friday. This is the biggest percentage increase in the monthly trade gap since February 1999.
In September, the goods deficit increased $5.6 billion from August to $47.6 billion, and the services surplus remained virtually unchanged at $11.1 billion.
Exports increased to $132 billion in September from $128.3 billion in August. Goods were valued at $90.3 billion in September, up from $86.8 billion in August, and services climbed to $41.6 billion in September, up from $41.5 billion in August.
According to highlights of the new report, the August-to-September rise in exports reflected increases in the following sectors: capital goods ($1.7 billion); industrial supplies and materials ($1.4 billion); consumer goods ($0.5 billion); automotive vehicles, parts and engines ($0.2 billion); and other goods ($0.2 billion). A decrease occurred in foods, feeds and beverages ($0.4 billion). Over the same period, the rise in imports reflected increases in: industrial supplies and materials ($5.5 billion); automotive vehicles, parts, and engines ($1.7 billion); capital goods ($0.8 billion); consumer goods ($0.7 billion); and other goods ($0.5 billion).
The goods and services deficit in September was down $23.7 billion from the same month last year.
Real gross domestic product (GDP) in the U.S. rose an estimated 3.5 percent (at an annual rate) in the third quarter, following four consecutive quarters of decline. "Most forecasters anticipate another moderate gain in the fourth quarter," Federal Reserve Chairman Ben Bernanke said in remarks to the Economic Club of New York today.
Economists have boosted their GDP forecasts for 2010 and 2011. In Bloomberg News' monthly survey of economists, respondents said they expect the nation's factories to drive economic growth in the U.S. According to the median of 64 forecasts, the world's largest economy will expand at a 3 percent annual rate in the last three months of the year, compared with the 2.4 percent estimated last month.
According to the Commerce Department's data on Friday, the U.S. trade deficit with China widened to $22.1 billion in September, the largest since last October.
Asian Manufacturers Post Stronger Growth
Manufacturing industries in the Asia-Pacific region have continued to expand business activity over several months, showing signs of a strong recovery in the Asian industrial sector. In October, China's industrial output increased by 16.1 percent over the same month last year, while retail sales had a year-over-year gain of 16.2 percent, the Associated Press reports.
India, Asia's third-largest economy, in September showed a 9.1 percent growth in industrial output over the same month the previous year, following an 11 percent gain in August, according to Agence France-Presse. Manufacturing output increased by 9.3 percent in September, mining gained 8.6 percent, electricity generation grew by 7.9 percent and production of consumer durable goods expanded by 22.2 percent.
In Japan, machinery orders climbed to 10.5 percent in September, more than double the pace initially forecast and signaling a significant turnaround in capital spending, which "would lend stability to a recovery that has depended on temporary factors including government stimulus and a rebound in production spurred by run down inventories," Bloomberg News reports.
However, some experts warn that a sustained recovery in Asian industrial markets depends largely on a rebound in foreign consumption and increased expenditure on manufactured goods from the Asian economies.
"Asia requires a return of global demand, and with credit expansion in developed economies being so weak, it is hard to know when that may develop," Patrick Bennett, a strategist at Société Générale in Hong Kong, told the Wall Street Journal (subscription required).
European Recovery Remains Mixed
Data released last week show the overall Eurozone economy expanding in line with the region's growth in industrial production, with GDP rising 0.4 percent in the third quarter of 2009, Seeking Alpha reports. German GDP climbed by 0.7 percent and French GDP grew by 0.3 percent, the second consecutive quarter of growth for both countries, while Italy broke its five-month long contraction with a gain of 0.6 percent in Q3.
Other Eurozone countries, however, are not faring as well. Ireland, Greece, Finland and Spain continued to contract between 0.3 and 1.4 percent in the last quarter, while the United Kingdom posted a 0.4 percent decline in its economy. In Spain, the unemployment rate is expected to exceed 20 percent in 2010, Seeking Alpha adds.
"The emerging recovery is patchy, traceable to national differences ranging from fiscal policies to industry profiles," the Wall Street Journal notes (subscription required). "It also could suffer a relapse if rising unemployment chills a nascent rebound in consumer spending, as government officials have warned."
These figures indicate that a European recovery increasingly depends on the larger Eurozone economies. Germany, the region's largest economy and one of the world's top exporters, has seen industrial output rise by 2.7 percent in September, while exports gained 3.8 percent due to rising demand for German-made goods, AFP reports. It remains to be seen, however, whether the gains will be sufficient to offset contraction in nearby nations.
Manufacturing Equipment Orders for September
Consumption of U.S. machine tools and related technologies totaled $153.55 million in September, up 17.8 percent from August, according to the latest monthly U.S. Manufacturing Technology Consumption (USMTC) report from the American Machine Tool Distributors' Association and the Association for Manufacturing Technology.
On a regional basis: Northeast region manufacturing technology consumption in September rose 50.8 percent from August; consumption in the Southern region dropped 42.8 percent; Midwest region consumption rose 33.8 percent; consumption in the Central region increased 8.5 percent; and Western region manufacturing technology consumption in September was up 39.7 percent.
With a year-to-date total of nearly $1.2 billion, 2009 manufacturing tech consumption is down 67.8 percent from 2008, as reflected in orders for specific manufacturing equipment.
According to a new report from the Robotic Industries Association, North American robotics companies suffered a 30 percent decline in orders for new units in the first nine months of 2009, along with a 43 percent decrease in dollar value over the same period. The industry trade group's latest figures indicate steep declines in sales to automotive customers — both original equipment manufacturers and their suppliers — historically the largest purchasers of robots. Through September 2009, $425.8 million worth of robots has been ordered by North American manufacturing companies, compared with last year's January-September totals worth $743.4 million.
In a separate report, the Conveyor Equipment Manufacturers Association (CEMA) said that booked orders for conveyor products rose 16 percent in September from August. CEMA's September 2009 Booked Orders Index was down 17 percent from the September 2008 index. Shipments for September were up 4 percent from the prior month.
New Jobless Claims Decline, But Worries Remain
According to the latest weekly claims report from the U.S. Department of Labor, seasonally adjusted new initial claims for unemployment fell to 502,000 for the week ending November 7, a decrease of 12,000 from the previous week's total and bringing the four-week moving average 4,500 lower than in the preceding reporting period.
Despite an ongoing recovery in numerous sectors of the United States economy, the job market remains unsteady, with the unemployment rate reaching a 26-year high of 10.2 percent this October.
"We've lived with this disjunction between rising output and falling employment for only a few months so far, but the consensus forecast sees it continuing for some time — a disturbing prospect," the Wall Street Journal claims.
According to a separate report released last week by the Labor Department, employers advertised 2.5 million job openings at the end of September, meaning an average of 6.1 unemployed workers are competing for each available position. This figure is slightly lower than the 6.2 percent reported the previous month, a nine-year high.
The data have economists continuing to claim that lingering instability in the job market may threaten the overall health of the U.S. economy, and others warn that unemployment could remain high for some years to come.
Last week, President Obama announced he will convene a special forum in December to examine economic growth and specifically address the unemployment problem, the Washington Times reports. Participants will include economists, corporate executives, small-business owners, labor union officials and representatives from the non-profit sector.
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