core capital goods orders post largest fall in eight
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[October 28, 2014]
WASHINGTON (Reuters) - New orders
for capital goods by U.S. businesses recorded their biggest drop in
eight months in September, but the surprise decline was likely to be
temporary as business sentiment has been upbeat in recent months.
The Commerce Department said on Tuesday non-defense capital goods
orders excluding aircraft, a closely watched proxy for business
spending plans, fell 1.7 percent last month, the largest decline
since January of this year.
August's orders for the so-called core capital goods orders were
revised to show a 0.3 percent gain instead of the previously
reported 0.4 percent rise.
The decline in core capital goods orders, which confounded Wall
Street's expectations for a 0.6 percent increase, is at
odds with business surveys that have showed increased business
appetite for capital investment.
With core capital goods declining, overall orders for durable goods
- items ranging from toasters to aircraft that are meant to last
three years or more - fell 1.3 percent.
It was the second straight month of declines after August's 18.3
percent tumble. Durable goods orders have been volatile in recent
months because of big swings in aircraft orders.
Last month, transportation orders fell 3.7 percent as aircraft
orders surprisingly dropped 16.1 percent. Boeing recently reported
on its website that it had received 122 orders last month, up from
107 in August.
Automobile orders dipped 0.1 percent in September. Apart from
transportation, other categories in the report were mixed.
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Core capital goods shipments slipped 0.2 percent last month after
August's 0.1 percent gain.
Shipments of these goods are used to calculate equipment spending in
the government's gross domestic product measurement.
The government's advance GDP estimate on Thursday is expected to
show the economy expanded at a 3.0 percent annual pace in the third
quarter after the second quarter's robust 4.6 percent rate.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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