Post-Attack Economic Reports Show Nation's Struggles

A new month brought with it evidence that the U.S. economy is struggling more than previously thought, as new reports released Thursday illustrated the immediate impact the Sept. 11 terrorist attacks had on an already struggling economy.

The National Association of Purchasing Management said Thursday its manufacturing index plunged in October, while the Commerce Department said U.S. construction spending fell 0.4% and consumer spending fell at its fastest pace in more than 14 years during September.

These reports, combined with a Labor Department report showing that the number of so-called continued jobless claims rose by 55,000 to 3.69 million for the week ended Oct. 20, the highest level since 1983, left many analysts warning of a long road to recovery, Bloomberg reported.

All of these reports reflect the health of trucking customers.

Factories generate truck shipments of raw materials and parts coming in, and finished goods going out. Construction spending requires shipments of building materials, and leads to later shipments of appliances and home furnishings.

And because consumer spending accounts for nearly two-thirds of the nation's economic activity, even the slightest reduction could cause ripples through the trucking industry.

NAPM said its index decreased to 39.8 last month from 47 in September, the lowest level since the last recession. Any reading below 50 indicates a contraction, a level not seen since July 2000.

One analyst told Bloomberg it will take the manufacturing sector at least a few extra months than previously thought to recover because of the terrorist attacks.

Meanwhile, construction spending fell for the fifth month in a row in September, to a seasonally adjusted annual rate of $843.1 billion. This is the lowest level of construction spending since December 2000.

The drop was blamed on builders doing less work on housing and industrial projects, and this may continue as companies rethink expansion plans in the aftermath of Sept. 11.

Commerce also reported that consumer spending dipped 1.8% in September, which followed a 0.3% gain in August and was double what analysts were expecting, according to Reuters.

This was the first decline in consumer spending since May 1999, showing just how much shell-shocked consumers closed their wallets in the wake of the attacks. Reuters noted this trend could continue into next year.

The report also showed that personal income was unchanged in September at $8.8 trillion.

Although continued claims did rise, Labor did offer one “bright spot,” as the number of workers signing up for first-time jobless benefits declined by 10,000 last week to a seasonally adjusted 499,000. However, The number of U.S. workers remaining on unemployment aid stood at its highest level in more than 18 years.