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Orders for US business equipment stall after two-month gain
[WASHINGTON] The momentum in orders for business equipment stalled in August following gains the prior two months as US 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 per cent last month after rising 2.1 per cent in July, data from the Commerce Department showed Thursday in Washington. Orders for all durable goods - items meant to last at least three years - dropped 2 per cent, reflecting declines in defense and aircraft.
The relatively steady reading in capital goods bookings following the best back-to-back gains in more than a year signals companies waiting to assess prospects for US 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 US economist at RBC Capital Markets LLC, 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 estimated bookings would fall 2.3 per cent, with projections ranging from a 5 per cent drop to a 1.5 increase.