Manufacturers Belie Slowing Pace; Capital Goods Sell Briskly, But Consumers' Demand For Autos, Furniture Drops
Evidence of declining consumer demand keeps mounting, even amid upbeat economic developments.</br></br>Major U.S. manufacturers, despite high energy and raw-material costs, are continuing to see firm growth in orders, aided by the weaker dollar and the continuing move to replace equipment bought during the investment boom of the 1990s.</br></br>The strength is visible more among capital-goods producers and less among consumer-oriented manufacturers. Furniture makers and others in the latter category are seeing the impact of slowing job growth, a decline in consumer confidence and low household savings rates. Indeed, noticeably absent from the rosy projections are auto makers and their suppliers, who have cut expected profit and production plans.</br></br>At the same time, U.S. business inventories rose in February, expanding 0.5% to a seasonally adjusted $1.288 trillion, while sales fell 0.4%, the steepest decline since April 2003, the Commerce Department said yesterday.</br></br>Combined with the reports earlier this week of a record February trade deficit and disappointing March retail sales, the data added another indication that America's 2005 economic growth may be weaker than the gradual slowing many economists have anticipated from last year's 4.4% pace.