[ad_1]
New orders for key capital goods manufactured in the United States unexpectedly declined in December due to lower demand for machinery and primary metals, suggesting a further slowdown in capital expenditures in equipment likely to curb economic growth.
The Commerce Department said Thursday that non-defense equipment goods orders, excluding aircraft, represented a closely monitored surrogate for corporate spending plans, and had fallen 0.7 %. November data was revised downward to indicate that these basic equipment goods orders fell 1.0% instead of a 0.6% decline, as previously noted.
Economists polled by Reuters forecast a 0.2% rise in basic equipment orders in December. Basic equipment orders increased 6.1% year-on-year.
Shipments of essential capital goods increased 0.5% in December, after an unrevised drop of 0.2% the previous month. Major shipments of capital goods are used to calculate capital expenditures to the extent of government gross domestic product.
While the rebound in major capital goods shipments suggests a moderate growth in capital equipment spending in the fourth quarter, the unexpected drop in orders suggests a weakness in the coming months.
The December report was delayed by a 35-day partial closure of the federal government that ended on January 25. The Commerce Department stated that "processing and data quality were monitored throughout the operation, and response and coverage rates were equal to or greater than normal release."
Last week's mixed report followed data showing a sharp drop in retail sales in December, prompting economists to cut their GDP growth estimates by 1.2 percentage points for the fourth quarter, at a rate of annualized 1.5%. The economy grew at a rate of 3.4% in the third quarter.
The slowdown in corporate spending has been recognized by the Federal Reserve, which attributed it to uncertain economic prospects related to slowing global growth, trade tensions, slackening of fiscal stimulus and government shutdown.
In its minutes of its January 29-30 January meeting, the US central bank said that "manufacturers' contacts in a number of districts have indicated that such factors cause them to delay or postpone their capital expenditures." .
Business equipment spending has slowed since the second quarter of 2018, despite the $ 1.5 billion tax cut by the White House. Some companies, including Apple, have used their tax profits to buy back large-scale shares. A survey conducted last month showed that lower taxes did not encourage companies to change their hiring or investment plans.
In December, machinery orders decreased 0.4%. Orders for primary metals fell 0.9%. Orders for electrical equipment, appliances and components also declined. Orders for computers and electronic products have not changed.
Overall orders for durable goods, ranging from toasters to airplanes, expected to last three years or more, increased 1.2% in December. This reflected a 3.3% increase in demand for transportation equipment.
Orders for durable goods rose 1.0% in November.
Orders for motor vehicles and parts increased 2.1% in December. Defense aircraft orders fell by 30.5% and civil aircraft reservations increased by 28.4%. Boeing announced on its website that it received 218 aircraft orders in December, a gain of more than four times that of 51 in November.
[ad_2]
Source link