Disappointing Demand for U.S. Capital Goods

Orders for goods such as computers and machinery rose less than forecast in August, showing a pickup in U.S. business spending will take time to develop.

Bookings (CGNOXAI%) for non-military capital equipment excluding aircraft increased 1.5 percent after a 3.3 percent drop in July, the Commerce Department reported today in Washington. The median forecast of economists surveyed by Bloomberg projected a 2 percent gain. Another report showed sales of new houses over the past two months were the weakest of the year.

Factory production is stabilizing as Americans replace older-model cars and companies invest in new technology. An escalating budget battle in Washington and higher interest rates mean companies will need to see bigger gains in sales to justify updating equipment, which will probably limit any rebound in manufacturing.


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