US Manufactured Capital Goods Fall in September

New orders for U.S. manufactured capital goods unexpectedly fell in September amid weak demand for computers and electronic products, which could temper expectations for an acceleration in business spending in the fourth quarter.

Other data on Thursday showed a drop in the number of Americans applying for unemployment benefits last week, pointing to sustained labor market strength and firming economic growth.

The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 percent after three straight months of strong gains.

These so-called core capital goods orders increased by an upwardly revised 1.2 percent in August. Economists had forecast core capital goods orders rising 0.3 percent last month after a previously reported 0.9 percent increase in August.

“This is a bit of a discouraging handoff to the fourth quarter. There is a reluctance to boost capex (capital expenditure) meaningfully,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza