Orders for Business Equipment Stall After Two-Month Gain
The momentum in orders for business equipment stalled in August after gains the prior two months as U.S. investment took a breather amid volatility in financial markets and concerns that global growth is slowing.
Bookings for non-military capital goods excluding aircraft fell 0.2% last month after rising 2.1% in July, data from the Commerce Department showed Sept. 24. Orders for all durable goods — items meant to last at least three years — dropped 2%, reflecting declines in defense and aircraft.
The relatively steady reading in capital goods bookings after the best back-to-back gains in more than a year signals companies waiting to assess prospects for U.S. demand as global growth slows and financial markets turn volatile.
A strong American consumer, powered by more jobs, growing incomes and low inflation, will be needed to help support the outlook for growth in the second half of the year.
“There’s demand to take on new capital expenditures,” Jacob Oubina, a senior U.S. economist at RBC Capital Markets, said before the report. “There’s some activity in the pipeline that could give us decent results in the near term.”
The median forecast of 79 economists surveyed by Bloomberg News estimated bookings would fall 2.3%, with projections ranging from a 5% drop to a 1.5% increase.
