Orders plummet for US industry. What will Biden do?
Bad, even very bad, news for US manufacturing: US industrial orders fell 3.6% month-on-month in October 2023, following a downwardly revised 2.3% increase in September and worse than market forecasts of a 2.8% decline.
This is the largest drop since April 2020, a sign that the industrial sector is suffering from high interest rates and inflation. Orders for transport equipment decreased by 14.7% , in particular for aircraft and components not intended for defense (-49.6%) .
Orders for electrical materials, household appliances and components (-1.1%), machinery (-0.3%) and primary metals (-0.3%) also fell. On the other hand, orders for metal products (0.4%) and computers and electronic products (0.3%) increased.
Excluding transportation, orders to factories fell 1.2%, and excluding defense, orders fell 4.2%. So without defense orders it would have been worse.
Here is a short term chart:
Let's see how the decline is the strongest in the last year. At this point we see on a five-year profile:
If we remove the 2020-21 period, shaken and chaotic due to Covid, we are returning to the industrial "Spleen" of 2018-19. The stimulus is over, the interest is considered high and the industry is paying for it. The collapse of orders in the aviation sector is sensational, which portends major problems for Boeing, the main player in the sector.
I think someone has to find a way to relaunch US manufacturing and this can happen either with an increase in consumption, or with a liberalization of the rules that indirectly slow down growth, or with public spending, including military spending. Ultimately Biden, if he wants to hope to keep his job, will have to do something.
Furthermore, these data make a reduction in FED interest rates even more likely, so we will have a boost in the valorization of securities, gold and the stock market.
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The article Orders collapse for US industry. What will Biden do? comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/crollano-gli-ordini-per-lindustria-usa-che-fara-biden/ on Mon, 04 Dec 2023 17:24:51 +0000.