Factory Orders in U.S. Fall More Than Forecast as Companies Limit Spending

[Purveyor]

Source: Bloomberg News

April 2 (Bloomberg) -- Orders to U.S. factories fell more than forecast in February, as companies scaled back investment plans on concern the economy was already in a recession.

The 1.3 percent decrease followed a 2.3 percent decline in January, the Commerce Department said today in Washington. Excluding orders for transportation equipment, which tend to be volatile, demand fell 1.8 percent, the largest decline since January 2007.

Businesses are cutting back as the biggest housing slump in a generation and record energy prices constrain consumer spending. The figures indicate the Federal Reserve's bid to loosen the credit squeeze by lowering the benchmark interest rate and pumping money into financial markets had yet to boost confidence.

``Business investment spending is likely to be weaker than we had thought earlier,'' said Dana Saporta, an economist at Dresdner Kleinwort, which correctly forecast the decline, in New York. ``This is likely to have an adverse effect on the growth of employment and income.''

Bernanke Testimony

Federal Reserve Chairman Ben S. Bernanke, testifying before Congress today, acknowledged for the first time that the economy may contract as homebuilding weakens further, unemployment rises and consumer spending slumps. ``It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly,'' Bernanke said in testimony to the Joint Economic Committee.


Read more: http://www.bloomberg.com/news/index.html?Intro=intro_news

[liberal N proud]

1. Can we call it a recession yet?