US factory orders falter, housing mood sours

WASHINGTON: Orders and sales at New York manufacturers decreased in August for the first time in more than a year and US homebuilders turned more pessimistic, indicating the economic slowdown is becoming broad-based.

The Federal Reserve Bank of New York’s so-called Empire State factory index on Monday showed bookings dropped for the first time since June 2009, while sales fell at the fastest pace since March 2009. The National Association of Home Builders/Wells Fargo confidence index unexpectedly declined to a 17-month low.

Slower consumer spending and less inventory rebuilding may restrain manufacturing after the industry led the economy out of the worst recession in seven decades. Treasury securities climbed on growing concern the global expansion will cool in the second half of the year more than central bankers estimated.

The reports are showing “a truly weak recovery”, said Tom Porcelli, a senior economist at RBC Capital Markets in New York. “There’s no sustained driver. Sentiment is pretty weak in both of these rather large segments of the economy.”

The yield on the benchmark 10-year Treasury note dropped to 2.59% at 11:30 a.m. in New York from 2.67% late on Aug. 13. Stocks hovered between gains and losses, with the Standard & Poor’s 500 Index down 0.1% to 1,078.54.

The New York Fed’s general economic index, which is a separate question not tied to orders or sales, rose to 7.1 this month from 5.1 in July. Economists forecast the measure would rise to 8, according to the median estimate in a Bloomberg News survey.