The economy has regained some traction
>> manufacturing accelerated last month, confirming federal reserve chairman alan greenspan's view that the economy has, quote, regained some traction. production at the nation's factories, mines, annuals was up .1% in august. that was, however, less than economists were looking for. they were looking for about half a percent rise. july's figure at the same time was revised higher. inventories, as you see there, up again .9% higher after a 1.1% increase in june. it was the biggest back-to-back gain in almost five years. the reason? fedex's chief economist jean long says that factory sales had been so strong, there is a genuine need for replenishing and rebuilding inventories. other signs of strength in manufacturing coming today from the state of new york. the federal bank of reserves -- or the federal bank of new york, rather,'s empire state manufacturing increased 28.3 in september. that was the biggest rise in 15 months. readings above zero indicate expansion. these gains in manufacturing and production send treasuries lower. check it out. 4.16% is the yield there. the bond down 11/32. on the shorter end of the yields, the two-year treasury down 3/32 at 2.47% there. the data is signs of a struggle economy and may indicate that the fed may raise rates when it meets next week. in fact, they may raise rates two more times this year. the dollar gained the most in more than a week against the euro and yen. after the numbers came out, you see the latest trades, you're buying less yen so the yen is back up again and the euro is trying to fight back and the pound unchanged. all three down against the dollar in new york trades. oil prices slip for the first time this week. crude oil futures finish the day, emphasis on "finish," down 1.8%, turning around 3% in the final 60 minutes. they had been up almost 2% intraday. opec says it will boost its output quotas for the third time this year, after past agreements failed to stop a surge in prices. oil futures had been higher earlier after a report from the u.s. government showed that supplies here, inventories plunge for the seventh straight week. also, of course, hurricane ivan, and probably most importantly a factor affecting oil today. the storms move through the gulf of mexico, forced companies to cut production. among the other energy movers today, all lower. gas, heating oil, natural gas. treasury secretary john snow spoke at a conference today in new york city on safeguardsing the u.s. financial system against potential terrorist attacks. bob bowdon attended that event and joins us now with the latest. bob?
>> thank you, matt. secretary snow came to thank the financial community for its progress in building technical redone den sis in computer and communication systems that would help keep markets functioning in the event of another terrorist attack. as an example of the progress, he cited the blackout from last summer, which he said provided a test of the american financial system that had not been possible in simulations.
>> the real test is due to markets stay open, can you go to our a.t.m. machine, trades your stock, can you trades your bonds, can you get the loan processed, can you make payments? and, by gosh, we saw that the financial system of the united states is awfully darn resilient.
>> secretary snow also discussed the economy with respect to the u.s. job picture. he expressed optimism about third quarter job growth and added that companies would be even more likely to hire if frivolous lawsuits were not driving up their health insurance costs.
>> one thing that's holding back job creation, of course, is frivolous lawsuits. it's driving up health care costs. and higher health care costs make employers more reluctant to hire because the employees are more expensive. legislation, important legislation is pending in the senate now. it's time to pass it.
>> on the matter of currencies, secretary snow also commented on the chinese won in an effort to get the chinese government to allow its currency to trades freely and no longer peg it to the dollar.
>> we're in continuous dialogue with the chinese on that subject. we're not satisfied with the pace of the forms on the currency. we want to see faster movement there.
>> finally on a day when august industrial production figures shows growth of .1% in july to an all-time high on that index overall, secretary snow expressed optimism about the manufacturing sector.
>> our manufacturing sector, to put it in perspective, is larger by about 50% than the entire economy of china. and is continuing to grow. and i spend a lot of time in our manufacturing states talking to people who run manufacturing enterprises. they're pretty confident. that's it. matt nesto, back to you.
>> interesting to point out on the i.p. index at an all-time high. good stuff. another police force has agreed to let its officers use stun guns. we're going to tell you where taizer international won the latest approval and taizer says there are more governments looking at adopting those weapons. that and more coming up.
