Hello, I'm Mark Pearson.
Despite a series of interest rate cuts, American business and industry appears to be fearful about investing in the future.
The U.S. economy grew at a feeble 7-tenths of a percent in the second quarter, due mostly to a 13.6 percent Drop in spending on new plants and equipment. That's the steepest reduction in such spending since 1982 when the American economy was bogged down in its worst recession since World War II. As many companies shelve expansion plans, some are laying off sizable portions of their workforce.
In Rural America the core of much of its economy is agriculture. And this week the assessment of prospects for this year's crop was largely confined to a single fundamental.
Crop conditions seem to be on a downward trend. This week's USDA report rates 59 percent of the corn crop in good to excellent condition, down seven percentage points from last week. The long, slow slide toward poorer conditions continues for soybeans. Fifty-five percent of the crop is rated good to excellent, off a few percentage points from last week. Cotton also slid backwards. The crop is rated 51 percent good to excellent.
Weather battered crops have made for a volatile market. Skittish traders have been reacting to every word from weather analysts sending some commodity prices swinging.
Hot, dry conditions have been the norm in the northwest. Most of the region is in a severe to extreme drought. The dry conditions are putting the squeeze on producers. Nearly half of pasture and range land in northwest states is rated fair to poor, forcing herds to be pulled from grazing earlier than normal.