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US factory orders rebound in Oct; shipments unchanged
[WASHINGTON] New orders for US-made goods rebounded in October after two straight monthly declines, lifted by rising demand for machinery and transportation equipment, but gains were likely to be limited amid persistently weak business confidence.
Factory goods orders increased 0.3 per cent also as bookings for computers and electronic products rose, the Commerce Department said on Thursday. Data for September was revised down to show orders dropping 0.8 per cent instead of falling 0.6 per cent was previously reported. October's gain in factory orders was in line with economists' expectations.
Factory orders decreased 0.4 per cent compared to Oct 2018.
The government also said October orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 1.1 per cent instead of surging 1.2 per cent as reported last week.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, rebounded 0.8 per cent in October as previously reported.
With business confidence remaining depressed, the improvement in orders is probably unsustainable. A survey on Monday from the Institute for Supply Management showed its measure of national factory activity contracting for a fourth straight month in November as a gauge of new orders slumped back to around the lowest level since 2012.
Business sentiment has been hurt by a 17-month trade war between the United States and China, weighing on manufacturing, which accounts for 11 per cent of the economy. While Washington and Beijing are working on a "phase one" trade deal, the United States has ratcheted up tensions with other trade partners including Brazil, Argentina and France.
Manufacturing has also been hampered by an inventory overhang and the grounding of Boeing's 737 MAX plane after two fatal crashes in Indonesia and Ethiopia.
Transportation equipment orders rebounded 0.7 per cent in October after dropping 3.2 per cent in the prior month. Orders for civilian aircraft and parts increased 10.7 per cent after decreasing 19.0 per cent in September.
Orders for computers and electronic products rose 0.6 per cent. Machinery orders jumped 1.2 per cent in October after dipping 0.1 per cent in September. But orders for electrical equipment, appliances and components dropped 1.8 per cent after rising 0.9 per cent in September.
Shipments of manufactured goods were unchanged in October after falling 0.4 per cent in the prior month. Unfilled orders at factories nudged up 0.1 per cent after being unchanged in September. Inventories edged up 0.1 in October after rising 0.3 per cent in September.