Offical figures out yesterday gave more credence to the view that the US remains in recession or is experiencing a "double- dip". Last month US manufacturing extended its deepest three-year slump in two decades and the trade deficit hit record levels.
The Federal Reserve said yesterday that industrial production shrank 0.2 per cent in December, following a 0.1 per cent rise in November and a 0.5 per cent drop in October. There were falls in every main category except mining and materials. Production of consumer goods and business equipment both fell by about 0.5 per cent.
US output is up less than 1 per cent since January 2000 - the first time there has been so little growth over any three-year period since 1983.
Separately, the Commerce Department reported that the US trade deficit widened in November to a record $40.1 billion (€37.5 billion) from a revised $35.22 billion in October on a sharp rebound in imports, suggesting much of the meagre rise in US consumer spending over the past quarter was on products from overseas.
The report in effect means growth in US goods and services probably amounted to a less than 1 per cent annual rate in the fourth quarter. Fed chairman Mr Alan Greenspan has characterised the economy's weakness as a "soft spot", but the Fed's latest figures, following reports of renewed declines in employment, hint at something worse. - (Financial Times Service)
