US factory orders unexpectedly fall in August

NEW orders for US-manufactured goods unexpectedly fell in August, while business spending on equipment appears to have pulled back in the third quarter.

Factory orders dropped 0.2 per cent after a slightly downwardly revised 4.9 per cent increase in July, the Commerce Department’s Census Bureau said on Thursday (Oct 3). Economists polled by Reuters had forecast factory orders would be unchanged after a previously reported 5.0 per cent rise in July.

Factory orders rose 0.3 per cent on a year-on-year basis in August.

The government also reported that orders for non-defence capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, increased 0.3 per cent in August instead of the previously reported 0.2 per cent.

Shipments of core capital goods dipped 0.1 per cent instead of edging up 0.1 per cent as reported last month. Nondefence capital goods orders dropped 1.3 per cent, as initially estimated.

Shipments of those goods decreased 1.8 per cent rather than 1.6 per cent, as initially estimated. These shipments go into the calculation of the business spending on equipment component in the gross domestic product report. That suggests a moderation in business investment in equipment in the third quarter after double-digit growth in the April-to-June quarter. REUTERS