US durable goods orders rise in May; Fed keeps rates unchanged
25 Jun 2009
In a sign that companies are gaining confidence and recession is coming to an end, new orders for US manufactured durable goods in May increased $2.8 billion or 1.8 per cent to $163.9 billion.
''This was the third increase in the last four months and followed a 1.8 per cent April increase. Excluding transportation, new orders increased 1.1 per cent. Excluding defense, new orders also increased 1.4 per cent,'' the US Census Bureau announced yesterday.
The Federal Reserve today signaled the worst of the slump is over, and kept the benchmark interest rate between zero and 0.25 per cent.
At the conclusion of its two-day policy meeting, the Fed on Wednesday said it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
''The pace of economic contraction is slowing,'' the Fed said in a statement. Officials said inflation will remain ''subdued for some time.''
Highlighting fresh signs of economic stability, treasury yields rose, and prices fell, after the Fed statement.
One of the greatest fears since the fatal deceleration in economy was that the world may fall into a deflationary cycle. A deflationary trend in economy will encourage consumers and investors to put off purchases, figuring things will get cheaper if they wait for some more time.
Freefall ends, vigorous recovery awaited
According to experts the freefall environment of the first quarter and late last year is over, but convincing signs of a vigorous recovery is yet to be seen in various sectors.
