US core capital goods orders and shipments soar in September

[WASHINGTON] New orders for key US-manufactured capital goods surged in September and shipments of these goods increased solidly, cementing economists’ expectations that economic growth accelerated in the third quarter.

Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending, jumped 0.9 per cent after an upwardly revised 0.9 per cent increase in August, the Commerce Department’s Census Bureau said on Wednesday (Nov 26).

Economists polled by Reuters had forecast these so-called core capital goods orders rising 0.2 per cent after a previously reported 0.4 per cent increase in August. The report was delayed by the recently ended 43-day shutdown of the government.

Shipments of core capital goods soared 0.9 per cent after dipping 0.1 per cent in August. There have been wild swings in core capital goods orders this year as businesses responded to President Donald Trump’s sweeping import duties.

Business surveys showed the tariffs have undercut manufacturing, which accounts for 10.2 per cent of the economy. But a surge in artificial intelligence investment has boosted some segments of manufacturing.

Business spending on equipment increased at a robust pace in the first half of the year. Economists expect investment in equipment was solid in the third quarter. The Atlanta Federal Reserve is forecasting gross domestic product increased at a 4.0 per cent annualised rate in the July-September quarter.

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The government said on Tuesday it would release the delayed third-quarter GDP report on December 23. The economy grew at a 3.8 per cent pace in the second quarter.

Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, rose 0.5 per cent in September after advancing 3.0 per cent in August.

Nondefence aircraft and parts orders fell 6.1 per cent, though Boeing reported on its website that it had received 96 aircraft orders compared with 26 in August. REUTERS