Latest Economic Signals Mixed
More economic numbers of importance to trucking came out Friday and the news is mixed
More economic numbers of importance to trucking came out Friday and the news is mixed.
The U.S. Commerce Department reported that the nation’s gross domestic product--the total value of goods and services produced--grew more slowly than previously reported in the first quarter of the year, increasing at an annual rate of 1.3%, not 2%. The news is still an improvement over the final quarter of last year, when the GDP increased just 1%.
Manufacturers reportedly slashed their inventories at the fastest pace in 18 years during the most recent quarter. With such a reduction in inventories, it’s believed that manufacturers may now increase production, which would translate into more shipments by trucks. However, that would depend on whether consumers are more inclined to open their pocketbooks, and that outlook appears mixed.
The University of Michigan’s consumer sentiment index reported on Friday morning the public is starting to feel more upbeat about the economy in general in May than they did the month before. The university's current conditions index, which measures how consumers feel about their own financial picture, rose, as well as its index of how consumers feel about the economy a year down the road.
Yet despite these feel-good numbers, also on Friday morning, there was news from the U.S. Commerce Department that orders for durable goods in April fell 5% after a 2.2% increase in March.
In addition, the National Association of Realtors reported sales of existing homes in the U.S fell 4.2% in April, falling to an annual rate of 5.2 million homes from a revised annual rate of 5.43 million the month before, but the rate is still more than 4% above figures from April 2000.
All this news follows comments from Federal Reserve Chairman Alan Greenspan, who on Thursday night said the worst of the U.S. economic slowdown may not be over. He indicated the central bank would again cut interest rates in order to stimulate growth. So far this year they have cut rates by 2.5 percent.
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