While you were sleeping: Weak US manufacturing, housing data
While you were sleeping: Weak US manufacturing, housing data before Fed meets
Oct. 29 (BusinessDesk) – US manufacturing production rose just 0.1 percent last month while contracts to buy existing homes posted their biggest drop in 3 ½ years, suggesting the federal shutdown helped take some air out of the world’s biggest economy.
US manufacturing output was weighed down by a 0.5 percent decline in production of computers, electronic goods and appliances, according to Federal Reserve data. Automobile production slowed to 2 percent from 5.2 percent in August.
Contracts to buy previously owned American homes dropped 5.6 percent last month to the lowest level this year, in the biggest decline since May 2010, according to the National Association of Realtors.
“The economy is in a shutdown-related soft patch in the fourth quarter,” Nariman Behravesh, chief economist at IHS in Lexington, Massachusetts, told Bloomberg. “Everyone started to be a little more cautious in September.”
Shares edged higher on Wall Street. The Dow Jones Industrial Average gained 0.2 percent to 15594.14 and the Standard & Poor’s 500 Index rose 0.3 percent to 1764.61.
JC Penney led gainers on the S&P 500, jumping almost 10 percent after the retailer reiterated its forecast for a gain in third-quarter same store sales.
The greenback edged up to 97.66 yen and the euro traded at $1.3806 amid expectations the Federal Reserve will maintain its stimulus measures, buying US$85 billion a month of bonds, at the conclusion of its two-day meeting that starts on Tuesday in the US. The Dollar Index rose 0.1 percent to 79.234.
The Fed has said it wants more evidence that the US economy is growing at a sustainable pace before it will consider tapering its stimulus efforts. Reuters reports that many economists expect the Fed to keep policy unchanged through at least the end of the year and begin reducing its bond buying in March 2014.
"It may turn out that a neutral FOMC is a green light to keep selling the dollar until November headline data begin appearing in early December, " Steven Englander, global head of foreign exchange strategy at CitiFX, said in a note, according to Reuters.
Brent oil for December climbed 1.6 percent to US$108.62 a barrel on the ICE Futures Europe exchange and on the New York Mercantile Exchange, West Texas Intermediate crude rose 0.4 percent to US$98.25 a barrel ahead of the Fed meeting and after figures showed Libya’s crude oil output fell.
National Oil Corp said crude output in Libya declined to 250,000 barrels a day because of labor protests, according to Bloomberg.