US Business Spending Was Hit by Political Shutdown

November 4, 2013 Share Print 0

Orders for a wide range of U.S.-made capital goods sank more than previously estimated in September, a sign companies cut their investment plans sharply as Washington hurtled to the brink of default.

New orders of non-military capital goods other than aircraft, an indicator of business spending plans, fell 1.3 percent during the month, the Commerce Department said on Monday.

The data suggests businesses may have shut their wallets as a political impasse threatened to lead the government to miss payments on its obligations, and could give the Federal Reserve more reason to leave its bond-buying stimulus program at full throttle for the rest of 2013.

Previously, the government had estimated that the gauge of business spending plans dropped 1.1 percent in September.

via Reuters

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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.