Economic Slowdown Wears On Key US Regions
Key regions of the United States remained mired in recessionary conditions this month, data Monday showed, as the slowdown in the world's largest economy wore on and inflation continued to hurt businesses.
Business activity declined in New York city, according to the National Association of Purchasing Management-New York, as the ongoing credit crisis hamstrung the nation's financial capital.
Separate reports also showed business activity in the Milwaukee region contracted in March while manufacturing activity in Texas retrenched.
Business activity in the factory-heavy U.S. Midwest also contracted in March for the second month running, while a price component rose, according to a report that highlighted worries of recession and inflation.
The National Association of Purchasing Management-Chicago business barometer rose to 48.2 from 44.5 in February, but remained below the 50 level that separates contraction from expansion.
"This report has a strong stagflationary feel to it with activity continuing to contract, but with prices pressures intensifying," analysts at Bear Stearns said in a note on the Chicago report.
Still, the Chicago index figure was better than the 46.0 foreseen in a Reuters poll, and Wall Street took an optimistic view of the data. Stocks rose, while the dollar edged up against the yen and held steady against the euro.
U.S. government bonds, which generally benefit from signs of a weakening economy, pared earlier gains after the Chicago data, but were still in positive territory on the day.
Any Good News?
The good news for economic bulls came in the form of a sharp rise in the Chicago report's employment index to 44.6 in March from 33.5 in February. That was the biggest one-month employment gain since February 2002.
Also, the new orders index jumped to 53.9 in March from 48.8 in February.
On the inflation front, however, the news was bad. The measure of prices paid jumped to 83.9 in March -- its highest since June 2006 -- from 79.4 in February.
In New York, recent turmoil in financial markets continued to weigh on the city's economy.
The National Association of Purchasing Management-New York's index of local business activity fell to 425.8 in March -- the lowest since November 2007 -- from 427.7 in February.
"Challenging financial market conditions have become a common theme," the report said.
The report also showed companies were concerned about high energy costs.
Business activity in the Milwaukee region contracted in March as the level of new orders slumped and input prices jumped.
The National Association of Purchasing Management-Milwaukee business barometer fell to a seasonally adjusted 47 from 53, below the 50 level separating expansion from contraction.
The Federal Reserve Bank of Dallas' Texas monthly manufacturing index of general business activity slid to minus 22.7 in March from negative 21.4 in February. It was the ninth consecutive reading below zero, indicating contraction.
Another report showed help-wanted postings on major U.S.-based Internet job boards were down 0.6 percent in March from a year ago, the measure's first-ever decline on a year-over-year basis.
The Conference Board said its gauge of the total number of unduplicated online jobs fell to 3.73 million in March from about 3.75 million a year ago, and also down from 3.93 million in February 2008. The March figures reflect the sum of the number of ads from mid-February to mid-March.