In spite of rise in orders for durable goods, economic crisis expected to continue

2008-11-04 22:02:03 (GMT) (WiredPRNews.com - Business)

According to analysts, though there was a sudden rise in the demand for pre-manufactured goods due to a rebound in the demand for autos and aircrafts; the economic situation in the US continues to remain seriously troubled as is evident with the trend. According to a statement released by the Commerce Department on Wednesday, orders for durable goods or items, which last for at least three years or more, were higher by 0.8 percent.

According to the department, the month of August saw a fall of 1.8 percent in the orders as compared to last year. They reiterated that the economic crisis remained weak and is expected to worsen further in spite of an increase in sales in the month of September. According to Decision Economics’ senior global economist Pierre Ellis, this seems to be the last gasp before a turmoil unveils in the financial sector as there is sure to be a dip in the production even as inventories jump.

The stock market looked up following expectations that there would be an interest rate slash by the US Federal Reserve in a bid to revamp and shore up economy. This is the second time this month that the interest rates will be slashed. There was a positive feeling also about the talks of merger between Chrysler and General Motors. Possibility of cut in interest rates resulted in higher debt prices in the US treasury.

The transportation sector saw the maximum rise in orders for durable goods including auto parts but due to a steep fall in the unit sales this is not expected to last.