Reuters Writes: Robust auto sales keep economy on steady growth path
WASHINGTON (Reuters) – The U.S. economy appears to be faring better in the third quarter than analysts had feared with automakers reporting surprisingly strong August sales on Wednesday, helping to buoy expectations of a pullback in monetary stimulus ahead.
In another report, the Federal Reserve said strong demand for autos helped keep the economy on a “modest to moderate” growth path in recent weeks, an assessment that leaves the door open for a reduction in the central bank’s bond purchases.
Auto sales rose 17 percent last month to a seasonally adjusted annual rate of 16.1 million units. That was the fastest pace since October 2007 and beat the 15.8 million-unit rate analysts surveyed by Reuters had expected.
Auto sales are a key leading indicator of consumer spending, which accounts for about 70 percent of U.S. economic activity.
“We continue to head in the right direction,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “With vehicle sales above 16 million (and) a slow but steadily improving job market, the Fed is going to feel comfortable tapering in September.”
AP Writes: US factory orders drop 2.4 percent in July
WASHINGTON (AP) — Orders to U.S. factories fell in July by the sharpest amount in four months, held back by weaker demand for commercial aircraft and heavy machinery. A key category that reflects business investment plans also fell.
Factory orders dropped 2.4 percent in July compared with June, when orders rose 1.6 percent, the Commerce Department reported Thursday.
Orders for core capital goods, a category viewed as a proxy for business investment spending, fell 4 percent in July.
Orders for durable goods, items expected to last at least three years, declined 7.4 percent, a slightly bigger drop than the 7.3 percent fall estimated in a preliminary report last week. It was the biggest decline since a 12.9 percent fall in August 2012. Orders for nondurable goods, items such as chemicals, food and paper, rose 2.4 percent in July after a 0.5 percent decline in June.