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 The Commerce Department said on Tuesday non-defense capital goods
orders excluding aircraft, a closely watched proxy for business
spending plans, slipped 0.3 percent last month after a downwardly
revised 1.6 percent decline in August.
Economists polled by Reuters had forecast these so-called core
capital goods unchanged after a previously reported 0.8 percent drop
in August.
Manufacturing has been hobbled by a strong dollar and spending cuts
in the energy sector. Manufacturing, which
accounts for about 12 percent of the economy, has also been hit by
efforts by businesses to reduce an inventory bulge and by slowing
global demand.
The downbeat report added to weak trade, retail sales and industrial
production data that have suggested the economy lost significant
momentum in the third quarter.
According to a Reuters survey of economists, gross domestic product
likely expanded at a 1.6 percent annual rate in the third quarter,
slowing from a brisk 3.9 percent pace in the second quarter. The
government will publish its advance
third-quarter GDP estimate on Thursday.
The dollar has gained 15.4 percent against the currencies of the
United States' main trading partners since June 2014, undermining
the profits of multinational companies like Procter
& Gamble Co. and 3M Co.
A plunge in oil prices has squeezed revenues for oil field companies
like Schlumberger and diversified manufacturer Caterpillar Inc.
The continued weakness in business spending, together with signs of
a slowdown in hiring by companies, could raise further doubts on
whether the Federal Reserve will raise interest rates this year. The
U.S. central bank's policy-setting committee was due to convene a
two-day meeting on Tuesday.
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Shipments of core capital goods, which are used to calculate
equipment spending in the government's gross domestic product
measurement, rose 0.5 percent last month after a downwardly revised
0.8 percent drop in August.
Core capital goods shipments were previously reported to have
dropped 0.4 percent in August.
A 2.9 percent decline in transportation equipment spending also
helped to weigh down overall orders for durable goods - items
ranging from toasters to aircraft that are meant to last
three years or more - which fell 1.2 percent last month.
Transportation was dragged down by a 35.7 percent decline in
aircraft orders. Boeing reported on its website that it had received
only 29 orders last month, down from 52 aircraft in August. Orders
for automobiles and parts rebounded 1.8 percent.
((Reporting by Lucia Mutikani; Editing by Andrea Ricci))
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