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Economy - Friday

February 3, 2007 on 3:22 pm | In |

New orders at U.S. factories rose more than the 1.8% expected after an upwardly revised 1.2% gain in Nov. Ex transportation, orders rose 2.2%. Durable goods climbed 2.9%, down from the initial reading of 3.1%. But nondefense capital goods orders ex aircraft, a proxy for business investment, was revised up to a 3.1% gain. Nondurable goods such as soap and clothing rose 1.8%.

Consumer optimism revised down

The Reuters/Univ. of Mich.’s sentiment gauge rose to a 2-year high of 96.9 in Jan. from 91.7 in Dec. amid a strong economy and lower energy prices. Economists had expected the index to hold at its early Jan. reading of 98. Consumers’ views of current and future conditions also rose from Dec. but edged down from early Jan.

Future inflation gauge falls again

The Economic Cycle Research Institute’s future inflation gauge fell to 119.5 in Jan. from an upwardly revised 120.1 in Dec. The annualized growth rate declined to -2.8% from Dec.’s revised -2.1%. The inflation gauge has been in a downward trend since the fall of 2005.

The ECRI’s leading U.S. growth index rose to 140.2 in the week ended Jan. 26 from 139.2 in the prior week. The 4-week annualized growth rate picked up to 4.8% a 51-week high.

Treasury Sec’y Henry Paulson conceded that chances are slim for reaching a bipartisan deal on Social Security reform but said he at least hopes to “move the ball downfield.”

Tax hike stalls German car sales

German new vehicle registrations sank 11% in Jan. vs. a year before to 199,000 after the country’s big sales tax hike, industry data showed. It was the lowest Jan. level since German reunification in ‘90, maybe the weakest month since that time, after surging in Nov.-Dec. ahead of the tax hike. Adjusted for the extra sales day, sales dropped 15%.

Euro zone producer prices were flat in Dec. on lower energy costs, with the annual gain slowing to 4.1% from Nov.’s 4.3%. But that’s not expected to stop the European Central Bank from raising rates.

COMING UP MONDAY

ISM nonmanufacturing index for Jan., 10 a.m. EST (forecast: up 0.3 to 57).