Reports indicate slowing US economy - ACC

02 June 2006 21:38  [Source: ICIS news]

HOUSTON (ICIS news)--US economic reports released this week pointed to a cooling economy, the American Chemistry Council said on Friday.

Consumer confidence revealed consumers concerned about higher energy prices and interest rates and minor employment gains suggested reluctance among hiring managers, although the percentage of those seeking work declined to the lowest level in nearly five years, the ACC said in its weekly chemistry and economic trends report.

“There was more troubling news from auto manufacturers who reported the slowest sales since last fall following hurricanes Katrina and Rita,” the ACC report continued. "Construction spending was also down reflecting large declines in residential construction as the housing boom continues to deflate.”

The Institute for Supply Management reported that manufacturing activity expanded, but at a slower pace, the ACC said.

On the other hand, the productivity report showed strong gains and offset higher compensation costs, which may help mitigate some of the inflationary impact of higher energy and materials prices for US businesses, the ACC said. The consensus, however, was that such above-trend productivity gains were not likely to continue at this point in the business cycle.

"On the energy front, tensions with Iran eased as the US and other nations agreed on a package of incentives and penalties related to Iran’s nuclear expansion,” the ACC report said. However, 1 June marked the start of what was projected to be an active hurricane season.

Meanwhile, US chemical industry shipments rose 1.8% in April and chemical companies added 800 jobs to their payrolls, the ACC report said.

By: Brian Ford
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