New factory orders continue sliding

By Tom Stundza -- Purchasing, 4/2/2008 9:47:00 AM

U.S. factory orders fell a worse-than-expected 1.3% in February, the second straight month of decline. The worse-than-expected performance--double the downturn that economists had been expecting--is further evidence that a prolonged slowdown in housing and a severe credit crunch are raising risks of a recession. The Associated Press reports the falloff was widespread, with steep declines in orders for motor vehicles, various types of heavy machinery and demand for iron and steel.

Shortly after the report was issued, Federal Reserve Chairman Ben Bernanke, in his most pessimistic and blunt assessment to date, tells a congressional committee that “recession is possible” for the U.S. economy. CNNMoney.com reports that Bernanke says he isn’t yet prepared to declare that the economy has fallen into a recession. But, he admits it is possible that the economy could shrink over the first half of this year.