Orders for US durable goods and home sales probably retreated last month after rebounding the previous month, showing any economic recovery will be slow to develop, economists said before reports are released this week.
Bookings for goods meant to last several years fell 1.5 percent, the fifth drop in six months, the median forecast in a Bloomberg News survey said ahead of a US Commerce Department report on Friday. Combined sales of new and existing homes likely decreased to a 5.02 million annual rate, down from a 5.06 million pace in February, other figures may show.
Companies may not invest in new equipment nor add to payrolls until sales here and abroad show sustained gains and government efforts to stem the recession take hold. Record foreclosures are adding to the glut of properties on the market, leading to a drop in values that helps stabilize sales even as it hurts builder profits.
“It’s not a good environment for capital spending,” said Michael Feroli, an economist at JPMorgan Chase & Co in New York. “Housing doesn’t seem to be getting worse, which is good, because you’ve got to crawl before you can walk.”
A decline in orders for durable goods would follow a 3.5 percent jump in February. The Commerce Department’s report may also show bookings excluding transportation equipment dropped 1.2 percent last month, the Bloomberg survey showed.
Automakers continue to struggle. General Motors Corp (GM), operating with US$13.4 billion in US loans, will probably still need US$4.6 billion in additional aid this quarter, chief executive officer Fritz Henderson said last week. GM will file for bankruptcy protection unless it can restructure out of court by June 1, he said.
Other manufacturers are also hurting. General Electric Co, the world’s biggest supplier of power-plant turbines, jet engines and private-label credit cards, last week said its first-quarter profit fell 35 percent. The Fairfield, Connecticut-based company was hurt by real-estate losses, rising consumer-credit defaults and slumping demand for medical equipment.
“The global environment remains challenging,” chief executive officer Jeffrey Immelt told investors on a conference call last Friday. “While we’re seeing some positive indicators globally, we continue to be cautious.”
Sales of existing houses, which account for 90 percent of the market, fell last month to a 4.68 million annual rate, from a 4.72 million pace the prior month, the survey median showed. The National Association of Realtors’ report is due on Thursday.
A day later, Commerce Department figures may show new-home sales rose 0.9 percent to a 340,000 annual rate, the second month of gains, the survey median showed.
“Housing markets remained depressed overall, but there were some signs that conditions may be stabilizing,” including an increase in “potential buyers,” the Fed said in its Beige Book regional business survey released last Wednesday.
The Labor Department’s initial unemployment claims report this week, due on Thursday, may garner even more attention than usual. The Bloomberg survey median shows more Americans probably applied for unemployment benefits in the week ended yesterday.
First-time claims unexpectedly fell the prior week to the lowest level since January, Labor figures last Thursday showed. Another drop would be an “important sign that the labor market may be on a path to gradual recovery,” JPMorgan’s Feroli said.
Federal Reserve Chairman Ben Bernanke last week said the economy’s “sharp decline” may be slowing, and US President Barack Obama cited “glimmers of hope” as the stimulus package and policy measures start to take hold.
Finally, a report from the New York-based Conference Board today may show its gauge of leading indicators, which points to the direction of the economy over the next three to six months, declined 0.2 percent last month after a 0.4 percent drop the prior month, economists in the survey said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Wednesday said that a new chip manufacturing technology called “A16” is to enter production in the second half of 2026, setting up a showdown with longtime rival Intel over who can make the fastest chips. TSMC, the world’s biggest contract manufacturer of advanced computing chips and a key supplier to Nvidia and Apple, announced the news at a conference in Santa Clara, California, where TSMC executives said that makers of artificial intelligence (AI) chips will likely be the first adopters of the technology rather than a smartphone maker. Analysts said that the technologies announced on
NO RECIPROCITY: Taipei has called for cross-strait group travel to resume fully, but Beijing is only allowing people from its Fujian Province to travel to Matsu, the MAC said The Mainland Affairs Council (MAC) yesterday criticized an announcement by the Chinese Ministry of Culture and Tourism that it would lift a travel ban to Taiwan only for residents of China’s Fujian Province, saying that the policy does not meet the principles of reciprocity and openness. Chinese Deputy Minister of Culture and Tourism Rao Quan (饒權) yesterday morning told a delegation of Chinese Nationalist Party (KMT) lawmakers in a meeting in Beijing that the ministry would first allow Fujian residents to visit Lienchiang County (Matsu), adding that they would be able to travel to Taiwan proper directly once express ferry
CALL FOR DIALOGUE: The president-elect urged Beijing to engage with Taiwan’s ‘democratically elected and legitimate government’ to promote peace President-elect William Lai (賴清德) yesterday named the new heads of security and cross-strait affairs to take office after his inauguration on May 20, including National Security Council (NSC) Secretary-General Wellington Koo (顧立雄) to be the new defense minister and former Taichung mayor Lin Chia-lung (林佳龍) as minister of foreign affairs. While Koo is to head the Ministry of National Defense and presidential aide Lin is to take over as minister of foreign affairs, Tsai Ming-yen (蔡明彥) would be retained as the nation’s intelligence chief, continuing to serve as director-general of the National Security Bureau, Lai told a news conference in Taipei. Koo,
MANAGING DIFFERENCES: In a meeting days after the US president signed a massive foreign aid bill, Antony Blinken raised concerns with the Chinese president about Taiwan US Secretary of State Antony Blinken yesterday met with Chinese President Xi Jinping (習近平) and senior Chinese officials, stressing the importance of “responsibly managing” the differences between the US and China as the two sides butt heads over a number of contentious bilateral, regional and global issues, including Taiwan and the South China Sea. Talks between the two sides have increased over the past few months, even as differences have grown. Blinken said he raised concerns with Xi about Taiwan and the South China Sea, along with China’s support for Russia and its invasion of Ukraine, as well as other issues