Orders for U.S. business equipment stalled in September, capping a quarterly slump that signals investment will cool in the second half of the year.
Bookings for non-defense capital goods excluding aircraft, considered a proxy for future business spending on items such as computers, engines and communications gear, were little changed after rising 0.2 percent in August, less than previously estimated, a Commerce Department report showed today in Washington. Demand for all durable goods climbed 9.9 percent last month, exceeding the median forecast of economists surveyed by Bloomberg and reflecting a rebound in airplane orders.
Companies from Caterpillar Inc. to Advanced Micro Devices Inc. have tempered sales projections, raising the risk that cuts in business spending ahead of looming tax and government- spending changes will hold back the economy. In addition, exports to Europe and Asia are waning as global growth cools, further hindering American manufacturers.
“The undertones of this report are unquestionably weak,” said Jacob Oubina, a senior economist at RBC Capital Markets LLC in New York, who projected demand for capital equipment would stall. Economic growth “will come in softer than expected. It doesn’t bode well for fourth-quarter activity.”
The median forecast of 77 economists surveyed by Bloomberg called for a 7.5 percent gain in total durable goods orders. The August reading was revised to a 13.1 percent drop, the biggest since 2009, from a previously reported 13.2 percent decrease.
Bloomberg survey estimates for bookings ranged from gains of 0.3 percent to 14 percent.
Aircraft bookings, which are often volatile, surged 2,641 percent after plunging 97 percent in August, today’s report showed. Boeing Co., the Chicago-based aerospace company, said it received 143 orders in September, up from 1 the prior month and 260 in July.
A less volatile measure of bookings that excludes transportation equipment advanced 2 percent in September, the first gain in four months.
Excluding transportation, bookings were projected to climb 0.9 percent, according to the Bloomberg survey median.
Fewer Americans filed first-time applications for unemployment benefits last week as the seasonal volatility at the start of the quarter wound down, another report showed.