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Equipment orders post decline for second month
ORDERS placed with US factories for business equipment declined in September for a second month, a sign momentum in capital investment has paused as global trade concerns persist, Commerce Department figures showed on Thursday.
The report showed declines in bookings for electrical equipment, appliances and components, while orders for computers and electronic products were unchanged. Categories with gains included motor vehicles and parts, as well as machinery.
Uncertainty over trade is already cutting into companies' expected profits and expansion plans, making it a risk to the pace of economic growth. Companies are coping with higher prices for steel and aluminium, and some firms cite tariffs as an investment and growth concern.
The data cover orders and shipments affected by tariffs placed on goods by the US and China in July and August. In late September, the US imposed a 10 per cent levy on US$200 billion in Chinese goods, rising to 25 per cent on Jan 1, and US President Donald Trump has threatened fees on a further US$267 billion of merchandise.
While business spending has been boosted this year by corporate tax cuts and buoyed by consumption, the latest figures suggest it might be cooling toward the end of the year.
Even so, analysts project a 3.3 per cent annualised pace of GDP growth in the third quarter, resulting in the best back-to-back periods since 2014. The figures are due on Friday.
Bookings for civilian aircraft and parts, typically a volatile category, fell 17.5 per cent in September following a 63.7 per cent gain in the prior month, according to the report.
Meanwhile, orders for defense aircraft and parts more than doubled. Boeing previously said that the planemaker received 65 orders in September, down from 99 in August. BLOOMBERG