Egypt's Finance Minister unveils tax relief package, aims for "new chapter" with businesses    Mashroak pumps EGP 29.3bn to fund 213,500 projects nationwide: Local Development Minister    Egypt maintains balanced policy amid regional turmoil: Al-Sisi    Korea Culture Week wraps up at Cairo Opera House    American ambassador honours alumni of US-funded exchange programmes    Spain's La Brindadora Roja, Fanika dance troupes participate in She Arts Festival    Cairo to host international caricature exhibition celebrating Mahatma Gandhi's birth anniversary    World powers call for ceasefire, diplomatic resolution to Hezbollah-Israel conflict    Egypt, Cambodia discuss strengthening tourism, cultural cooperation    UAE, Ghana collaborate on nature-based solutions initiative    Meta Unveils New Wearables, AI Advancements, and a Glimpse of the Future    S&P upgrades Oman's credit rating to 'BBB-'    Colombia unveils $40b investment plan for climate transition    S. Korea's economy likely to beat expectations in '24    EU pledges €260m to Gavi, boosts global vaccination efforts    China, S. Korea urge closer ties amid global turmoil    EGP dips vs USD in early trade    Egypt pushes forward with "Great Transfiguration" project in Saint Catherine    ABK-Egypt staff volunteer in medical convoys for children in Al-Beheira    Egypt's Endowments Ministry allocates EGP50m in interest-free loans    Islamic Arts Biennale returns: Over 30 global institutions join for expansive second edition    Kabaddi: Ancient Indian sport gaining popularity in Egypt    Ecuador's drought forces further power cuts    Al-Sisi orders sports system overhaul after Paris Olympics    Basketball Africa League Future Pros returns for 2nd season    Egypt joins Africa's FEDA    Egypt condemns Ethiopia's unilateral approach to GERD filling in letter to UNSC    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Egypt's FM, Kenya's PM discuss strengthening bilateral ties, shared interests    Paris Olympics opening draws record viewers    Former Egyptian Intelligence Chief El-Tohamy Dies at 77    Who leads the economic portfolios in Egypt's new Cabinet?    Financial literacy becomes extremely important – EGX official    UNESCO celebrates World Arabic Language Day    Motaz Azaiza mural in Manchester tribute to Palestinian journalists    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



U.S. consumer sentiment rebounds; industrial output weak
Published in Albawaba on 17 - 10 - 2015

U.S. consumer sentiment rebounded strongly in early October, suggesting that the economic recovery remained on track despite headwinds from a strong dollar and weak global demand that have weighed on the industrial sector, particularly manufacturing.
The snapback in sentiment reported on Friday underscored robust domestic demand and offered hope that consumer spending would remain solid enough to support economic growth, which has slowed significantly in recent months.
The University of Michigan said its consumer sentiment index rose to 92.1 in early October from a reading of 87.2 September. The survey's current conditions sub-index shot up to 106.7 this month from 101.2 in September.
The index at current levels has historically been consistent with roughly a 4 percent annualized rate of consumer spending growth, according to economists.
"This suggests that U.S. household sentiment has turned an important corner, and is a hopeful sign on the outlook for consumer spending activity going forward, given signs of weakness in other parts of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York.
The rise in sentiment, which likely reflected cheaper gasoline prices, suggested limited impact from recent stock market volatility. Consumers were the most optimistic about their personal financial expectations since 2007.
Their views toward purchases of long-lasting manufactured goods were equally bullish.
Consumer spending accounts for more than two-thirds of U.S. economic activity and has been the bright spot in the economy as the industrial sector wobbles under the onslaught of slowing global growth and the resurgent dollar, which have eroded demand for U.S. manufactured goods.
It is also being weighed down by lower energy oil prices that have undercut capital investment in the energy sector, as well as an effort by businesses to whittle down their inventories.
U.S. stocks were trading higher on Friday, while prices were U.S. Treasuries were mostly weaker. The U.S. dollar rose against a basket of currencies.
WEAK INDUSTRIAL PRODUCTION
In a separate report, the Federal Reserve said industrial output slipped 0.2 percent on renewed weakness in oil and gas drilling after dipping 0.1 percent in August. Industrial production rose at an annual rate of 1.8 percent in the third quarter.
"We do not expect the recent slowing to lead to a broader pullback in aggregate growth, as service sector activity remains solid," said Jesse Hurwitz, an economist at Barclays in New York.
Manufacturing accounts for about 12 percent of the U.S. economy. Still, the weak industrial production report added to soft trade, retail sales and employment data that have pointed to a significant slowdown in growth after the economy expanded at a 3.9 percent annual pace in the second quarter.
Third-quarter growth estimates are currently around a 1.5 percent rate. Slower growth and low inflation have diminished expectations of an interest rate hike from the Fed this year.
Manufacturing output fell 0.1 percent in September even though robust demand for automobiles lifted motor vehicle and parts production by 0.2 percent. Manufacturing output dropped by 0.4 percent in August. For the third quarter, manufacturing output increased at a rate of 2.5 percent.
There were declines in the production of computer and electronic products, as well as electronic equipment, appliances and components. Primary metals and machinery output increased.
Mining production fell 2.0 percent as oil and gas well drilling tumbled 4.0 percent after increasing for two straight months. An almost 60 percent plunge in oil prices since June 2014 has hurt the profits of oil-field companies like Schlumberger (SLB.N) and Halliburton Haling, leading to deep cuts in their capital spending budgets.
Utilities production increased 1.3 percent in September. With output declining, industrial capacity use fell to 77.5 percent from 77.8 percent in August. Officials at the Fed tend to look at capacity use as a signal of how much "slack" remains in the economy and how much room there is for growth to accelerate before it becomes inflationary.
The lackluster industrial production picture was reflected in a swathe of manufacturers' results on Friday, with General Electric Co (GE.N) and Honeywell International Inc (HON.N) reporting dips in revenue along with profits that were better than forecast.


Clic here to read the story from its source.