US core capital goods orders beat expectations in November

[WASHINGTON] New orders for key US-manufactured capital goods increased more than expected in November, suggesting business spending on equipment maintained a steady growth pace in the fourth quarter.

Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 0.7 per cent after a downwardly revised 0.3 per cent gain in October, the Commerce Department’s Census Bureau said on Monday (Jan 26).

Economists polled by Reuters had forecast these so-called core capital goods orders increasing 0.3 per cent after a previously reported 0.5 per cent advance in October. Shipments of core capital goods rose 0.4 per cent after gaining 0.8 per cent in October.

The report, which was delayed by the 43-day shutdown of the federal government, followed on the heels of data last week showing strong consumer spending in October and November. The Atlanta Federal Reserve is forecasting gross domestic product increased at a 5.4 per cent annualised rate in the fourth quarter.

The economy grew at a 4.4 per cent pace in the July-September quarter, boosted by consumer spending and a smaller trade deficit. Business investment in equipment also contributed to the fastest economic growth pace in three years. REUTERS