Even as the United States braces for Hurricane Rita the effects of Hurricane Katrina are being assessed.
The chief executives of large U.S. companies expect sharply lower capital spending in the wake of Hurricane Katrina, but generally expect their businesses to absorb the impact of the disaster, an updated quarterly survey found... The [Business Roundtable's] overall economic outlook index fell to 88.2, compared with a pre-hurricane reading of 95.9. That is the index's lowest level since October 2003.
But the economy was wavering even before Katrina hit.
The index of leading economic indicators fell 0.2 percent in August, according to the New York-based Conference Board, a slightly smaller-than expected decline... July's indicators were revised to show a 0.1 percent drop from an original 0.1 percent increase... Only three of 10 components in the index fell, but the biggest drop -- lower consumer expectations -- was hefty. That trend continued into September, according to the latest University of Michigan sentiment survey...
Another index that tracks a range of economic data -- the Chicago Federal Reserve's national activity index, slipped in August but still suggested above-trend growth as well as the potential for inflationary pressure over the next year...
The Labor Department said the number of Americans applying for first-time unemployment benefits rose to 432,000 last week, up from a revised 424,000 in the previous week, originally reported at 398,000... Unadjusted for seasonal factors, jobless claims linked to Katrina totaled 194,000 in the past two weeks.
If the US economy's outlook appears to be weakening, the sustainability of Japan's recovery also appears to be in doubt. Japan's exports were up 9.1 percent in August compared to a year earlier, but a 21.1 percent rise in imports, mainly due to oil, cut its trade surplus by 80 percent. And the resilience of domestic spending remains questionable; the tertiary index, which measures spending in the services sector, was down 0.8 percent in July from the month before while the all-industries index, a proxy for overall economic activity, was down 0.8 percent from the month before.
Things don't look much better in Europe. Although the Conference Board's leading index for Germany rose 0.4 percent to 104.3 in July, Eurostat reported that industrial news orders in the euro-zone fell by 1.6 percent in July over the previous month while EU25 new orders fell by 0.7 percent. And in the UK, a Confederation of British Industry survey showed that a balance of minus 27 percent of firms reported that total order books were below normal in September -- only slightly up on August when it had been the lowest since October 2003 -- the balance for export orders weakened to minus 25 per cent -- their lowest levels since January -- but the balance for firms expecting to increase output rose to a positive 6 percent.