US durable goods orders unexpectedly rise in August

ORDERS for long-lasting US manufactured goods unexpectedly rose in August and there were signs that business spending on equipment regained some momentum after faltering early in the third quarter.

The Commerce Department said on Wednesday (Sep 27) that orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, gained 0.2 per cent last month. Data for July was revised lower to show orders for these goods decreasing 5.6 per cent instead of 5.2 per cent as previously reported.

Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, surged 0.9 per cent after a downwardly revised 0.4 per cent decline in the prior month. These so-called core capital goods orders were previously reported to have edged up 0.1 per cent in July. Some of the rise in the value of orders likely reflected higher prices.

Economists polled by Reuters had forecast durable goods orders falling 0.5 per cent last month and core capital goods orders being unchanged. Manufacturing, which makes up 11.1 per cent of the economy, is muddling along as higher borrowing costs slow demand for goods.

Since March 2022, the US central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25 per cent-5.50 per cent range.

A strike by the United Auto Workers union against General Motors, Stellantis and Ford Motor could pressure manufacturing. REUTERS