Tuesday, February 4, 2014
Factory, construction spending data hint at slowing economy
This article discusses how the U.S manufacturing activity has slowed down in the last month. Economists have argued it is mainly due to the frigid temperature and expect a rebound in the next couple months. Bad weather has hurt more than just the U.S manufacturing industry, but also U.S auto sales. This includes Ford Motor Co, General Motors Co, and Japan's Toyota Motor Sales.
http://www.reuters.com/article/2014/02/03/us-economy-construction-idUSBREA120X320140203
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2 comments:
This is definitely interesting as another article later that week, after the report came out, indicated that construction was one of the industries coming out with the bulk of new jobs. When thinking about this, we should also consider that the weather was unusually harsh this winter with cold weather continuing to be a trend. Weather, snowfall in particular, influences construction and whether it can take place or not. And with heavy weather, investors might not be as interested in stocks related to construction companies, believing that the returns might not be as high as hoped.
- US manufacturing has been struggling as globalization has increased and many domestic jobs are being outsourced. In Obama’s most recent State of the Union speech he talked a little about trying to bring some of these outsourced jobs back home. It will be interesting to see what kind of policies he implements when trying to do this. It will also be interesting to see how this will affect the global market and how other countries respond. Corporations will obviously be upset about this. In terms of the weather and a decrease in sales, it’s just part of the business cycle. People buy fewer cars in the winter months and more in summer months. I think we are all hoping for higher weather.
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