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Reply #27: Bit more from Bloomberg - it's the oil [View All]

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54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-24-05 09:52 AM
Response to Reply #11
27. Bit more from Bloomberg - it's the oil
Heh, guess maybe sixty-some bucks ain't sustainable after all. :evilgrin:

U.S. July Durables Orders Fall 4.9%; Ex-Transport. Down 3.2%

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a...

snip>

A measure of orders for business equipment fell by the most since October 2004, suggesting rising energy costs may have prompted some companies to adjust their spending plans. With consumers also pinched by record gasoline costs, the economy may receive less of a boost from spending in the months ahead, economists said.

``Higher energy costs have taken a toll on business plans to purchase capital equipment,'' said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York, before the report. ``There is enough uncertainty in the air that the prudent course is for companies to scale back on some of their business equipment purchases.''

snip>

Economists expected durable goods orders to fall from a previously reported 2.8 percent rise in June, according to the median of 62 forecasts in a Bloomberg News survey. Estimates ranged from a decline of 4.5 percent to an increase of 1 percent. Excluding transportation equipment, forecasts ranged from a decline of 1.5 percent to a gain of 1.7 percent. The government last week revised its factory orders data back through 1992.

snip to cheerleading>

Also, economists prefer to look at the trend in durable goods orders rather than month-to-month changes to better gauge factory demand and the July decline followed three straight increases.

``Most people were looking for a downward correction after recent data, but recent manufacturing sector data suggests the trend is picking up,'' said David Sloan, chief U.S. markets economist for 4Cast.com in New York.

snip>

``Utilization of factories is going up as demand starts to increase and that gives people more confidence in investing,'' Splinter said in an interview from Mountain View, California. ``We're confident that we are going to see orders increase for the next couple of quarters.''

more...
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