Orders for capital goods in the United States are unchanged; jobless claims increase

WASHINGTON (Reuters) – New orders for capital goods manufactured in the United States remained unchanged in October and shipments rebounded slightly, which could dampen expectations of faster spending. equipment in business at the beginning of the fourth quarter.

Weak business spending on equipment, coupled with a sluggish housing market, could raise concerns about the sustainability of the economic expansion that is now in its ninth year and the second one. longest of its history ever recorded.

Other data released on Wednesday showed that the number of Americans filing jobless claims had surpassed its highest level in four months last week. While this may not change the view that the labor market is narrowing, this suggests a slower pace of employment growth.

"The economy may have already had its best day for growth and prosperity a few months ago at the end of the summer," said Chris Rupkey, chief economist at MUFG. "The winter is coming for the economic outlook where business investment spending should be surpassed, and companies have let some workers go."

The Commerce Department said the stagnation of orders for non-defense capital goods, excluding aircraft, represented a tightly monitored indicator of corporate spending plans, following a revised decline in capital spending. down 0.5% in September.

It has already been reported that these orders for basic capital goods plunged 0.1% in September.

Economists polled by Reuters forecast a 0.2% rise in orders for basic equipment last month. Basic equipment orders increased 6.4% year-on-year.

Shipments of essential capital goods rose 0.3% in October, after a revised downward decline of 0.2% in the previous month.

Shipments of basic capital goods are used to calculate capital expenditures to the extent of government gross domestic product. Previously, they would have slipped 0.1% in September.

Business capital spending stalled in the third quarter and weakened despite the Trump administration's $ 1.5 trillion tax cut. Some companies, including Apple (AAPL.O) used their tax boon to buy back large-scale shares.

Equipment spending could also be negated by lower oil prices. Brent has fallen about 28% since early October because of growing concerns about slowing global growth.

The Federal Reserve has noted the slowdown in corporate spending, saying in its policy statement earlier this month that "fixed business investment has slowed relative to its rapid pace recorded earlier in the year" .

The .DXY dollar is kept at lower levels as compared to a basket of currencies after the data. Prices for US Treasury securities were trading lower while futures contracts standardized on the US stock index were trading higher.

TUMBLE TRANSPORT ORDERS

Global durable goods orders, ranging from toasters to airplanes, are expected to last three years or more, down 4.4% in October. This is the biggest drop since July 2017 and reflects a 12.2% drop in demand for transportation equipment.

Orders for durable goods edged down 0.1% in September.

Orders for motor vehicles and their parts rose 0.2% last month. Orders for defense aircraft dropped 59.3% and civil aircraft reservations fell 21.4%. Boeing Co (PROHIBIT) indicated on his website that he had only received 18 aircraft orders in October, up from 65 in September.

In a separate report released on Wednesday, the Labor Department reported that initial claims for unemployment benefits by the state had increased by 3,000, to reach 224,000 seasonally adjusted for the week ended November 17, the level the highest since the end of June.

Data from the previous week have been revised to indicate that 5,000 more requests were received compared to previous reports. Economists polled by Reuters predicted fewer than 215,000 claims last week.

The Labor Department said that no state had been estimated last week. Victims of Hurricane Florence and Michael, respectively, continued to affect the claims for North Carolina and Florida.

The four-week moving average of initial claims, considered a better measure of labor market trends, as it avoids week-to-week volatility, increased from 2,000 to 218,500 last week.

Disaster data covered the period covered by the survey for the non-farm pay component of the November employment report.

The four-week average of claims increased by 6,750 between the October and November survey weeks, suggesting some moderation in job growth this month. this. The payroll increased by 250,000 jobs in October, with unemployment at close to 3.7%, the lowest level in 49 years. It is considered that the labor market is close to full employment or almost.