In October US factories saw an unexpected increase in new orders for motor vehicles and other goods, a sign that the manufacturing sector might recover.
According to the Commerce Department orders for factory goods were up 0.8% in October after a 4.5% increase in September. Analysts fear that the new tax increases next year and the dramatic cuts in government spending could make the economy lose $600 billion and push into recession unless the US Congress agrees on a less though plan to reduce budget deficits.
According to the Institute for Supply Management the index of national manufacturing activity fell in November to its lowest level since July 2009, when economy began to emerge out from recession. In October orders for transportation equipment dropped 2.3%, while orders for motor vehicles and parts increased 3%.
Factory goods orders were up 1.3%, after an increase of 1.2% in September and shipments of factory goods were also up 0.4%, after an increase of 0.7% in September. Orders for durable goods increased 1.8%, while orders for non-defense capital goods excluding aircraft were up 2.9%, from an increase of 1.7% in September.