U.S. core capital goods orders increase strongly in October -Breaking
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WASHINGTON, (Reuters) – The solid increase in new orders for capital goods made in America in October suggests a recovery in equipment spending in the first quarter.
Commerce Department reported Wednesday that the Commerce Department saw 0.6% increase in orders for non defense capital goods, which is closely monitored for signs of business spending plans. This so-called core investment goods orders increased 1.3% in September.
Reuters polled economists and found that core capital goods orders were expected to rise 0.5%. A large part of last month’s increase was likely due to higher prices in the face of global shortages.
Core capital goods shipped rose 0.3% last month, after rising 1.3% in September. These shipments of core capital goods are used in the calculation of equipment spending for GDP measurements.
After four quarters of consecutive double-digit growth, business spending on equipment fell in the third quarter. A shortage of motor vehicle production weighed it down. Motor vehicle production is being affected by a global shortage in semiconductors.
As manufacturers battle to manage snarled supply chain, unfinished work is still piling up in factories. These factors, along with strong demand for goods and spending shifting back to services should keep the manufacturing sector, which makes up 12%, alive.
After falling 0.4% in September, orders for durable goods (everything from toasters and aircraft) fell 0.5% last month.
The 2.6% decline in transportation equipment orders in September, followed by a 2.8% drop in September, depressed them. After falling 2.2% in September, motor vehicle orders rose 4.8%.
The orders for this category of volatile civil aircraft plummeted 14.5% in September after falling 31.2%. Boeing (NYSE: ) stated on its website, that last month it received 10 orders for aircraft in comparison to 27 September.
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