U.S. Manufacturing Down In November

Manufacturing in the U.S. unexpectedly contracted in November as orders dropped to a three-month low and exports slowed.

The Institute for Supply Management‘s factory index decreased to 49.5, the lowest since July 2009, from 51.7 a month earlier, the Tempe, Arizona-based group said today.  Economists projected the index would ease to 51.4, according to the median forecast in a Bloomberg survey.  A reading of 50 marks the dividing line between expansion and contraction.

Less corporate investment in equipment as U.S. lawmakers debate the nation’s budget, weaker orders from overseas and disturbances related to the biggest Atlantic storm in history are converging to slow manufacturing.  Eleven of the 18 industries covered in the report reported business shrank last month.

“Manufacturing has slowed down,” Joshua Dennerlein, an economist at Bank of America Corp. in New York, said before the report.  “Manufacturers have to prepare for demand down the road, and they’re not actually sure what it’s going to be.”

Read more:  http://www.mcall.com/business/mc-allentown-manufacturing-october-20121203,0,334772.story

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Philadelphia Region Shoppers More Optomistic About Economy

A recent survey of people in the Metropolitan Philadelphia Region, which includes southeastern Pennsylvania, southern New Jersey and northern Delaware shows that people feel the economy is slowly recovering and 48% plan to spend a little more this year at Christmas.  People are cautiously optimistic but still have underlying concerns about their jobs and financial security.

Most likely holiday sales will be flat.  The good news is, things are not expected to continue declining and a few stores like WalMart and Kohl’s posted good third quarter profits.

About 50% of the people surveyed said they feel the economy will improve in 2010, which is up from 27% who felt the economy would improve this year.

Spending on non-gift items is expected to increase as people take advantage of holiday sales to update their wardrobe, for example, after putting their personal spending on hold.  Personally I fall into this category.  I will probably spend the normal amount on Christmas this year or less if I can take advantage of good sales.