Orders for U.S. Business Equipment Rise for Sixth Straight Month By Bloomberg
(Bloomberg) — Orders placed with U.S. manufacturers for business equipment strengthened in August, extending to six months a solid run of robust capital investment that’s helping fuel economic growth.
Commerce Department data Monday showed that the value of core capital goods, which does not include aircraft or military hardware, rose 0.5%, after a 0.3% upwardly revised month prior.
Bookings for all — or items meant to last at least three years — rose 1.8% from the prior month, reflecting a pickup in orders for commercial aircraft.
The median estimate in a Bloomberg survey of economists called for a 0.4% increase in and a 0.7% gain in total durables.
The economy’s strength has been built on the capital goods that businesses spend, such as electricity and machinery. In spite of factory capacity limitations, resilient consumer spending has fueled demand for durables despite lean inventories.
Core capital goods shipments, a figure that will be used to calculate investment in the government’s third-quarter gross domestic product report, rose 0.7% after a 0.9% gain.
Nearly 78% more commercial plane bookings were made. Boeing (NYSE.) Co. previously reported 53 orders in August, compared to 31 a month prior. The government’s data aren’t always directly comparable on a month-to-month basis.
Bookings varied, except for the volatile category of commercial aircraft. Orders rose for communication equipment, electrical hardware, and fabricated metals but declined for motor vehicles and computers.
Both unfilled orders and inventories for manufactured durable goods rose. This is a sign of lingering bottlenecks in manufacturing and the long lead times.
Recent manufacturing surveys have shown a softening trend due to supply chain disruptions. IHS Markit recently surveyed purchasing managers and found that September’s manufacturing index dropped to a low of five months. However, the data showing order backlogs rose to their highest level since 2007.
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