Among worries about Coronavirus, the economy, and the election (not necessarily in that order), there is good news. For example, as James Freeman notes in the WSJ, factories are humming along. The news is much better than economists expected “for people who make and build things.”
Now if politicians can just avoid returning to the blunt lockdown instrument that imposed such heavy costs last spring and provided such uncertain benefits, the U.S. revival can continue.
Wall Street Journal’s Jeffrey Sparshott reports:
Orders for long-lasting factory goods increased for the fifth consecutive month in September, the latest sign manufacturing companies are rebounding from supply-chain disruptions and shutdowns related to the coronavirus pandemic.
New orders for durable goods—products designed to last at least three years—rose 1.9% in September compared with August, the Commerce Department said Tuesday.
A closely watched proxy for business investment—new orders for nondefense capital goods excluding aircraft—increased by 1% last month. The measure had recovered all of its pandemic-related losses by August, suggesting that businesses have ramped up capacity in anticipation of growing demand.
Rising COVID cases have been weighing on stock prices, continues Mr. Freeman.
But at least some market participants believe that governments will avoid a repeat of the spring shutdowns with all the societal collateral damage.
From the WSJ’s Mischa Frankl-Duval and Amber Burton:
“Some investors are… betting that authorities will avoid the stringent lockdown measures put in place in the spring, which brought the global economy to a jarring halt.”
“At the moment, the market is discounting for further lockdowns and for the economy to suffer dramatically again, and I just don’t see that,” said Patrick Spencer, managing director at U.S. investment firm Baird. “We’re in a V-shaped recovery.”