In this news, we discuss the U.S. factory orders miss expectations; business spending improving.
WASHINGTON (Reuters) – New orders for US-made products rose less than expected in August, although business spending on equipment appears to be picking up, which likely supported the economy in the third quarter.
The Commerce Department said on Friday that factory orders rose 0.7% after accelerating 6.5% in July. Economists polled by Reuters had forecast factory orders to rise 1.0% in August.
The manufacturing sector, which accounts for 11.3% of economic activity in the United States, is recovering from its pandemic low as companies rebuild their inventories. The pace of the expansion, however, is slowing as the coronavirus crisis persists and the fiscal stimulus boost wanes.
The Institute for Supply Management reported Thursday that its measure of activity at domestic factories fell in September, as new orders fell by more than 16-1 / 2 years.
Unfilled orders at factories fell 0.6% in August after falling 0.7% in July. Factory inventories were unchanged, while shipments of manufactured goods rose 0.3%.
The government also said that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of companies’ spending plans on equipment, rose 1.9% in August. instead of increasing by 1.8% as reported last month.
Basic capital goods shipments, which are used to calculate spending on commercial equipment in the GDP report, increased 1.5% as previously reported.
Business investment fell at a record annualized rate of 26% in the second quarter, as spending on equipment slumped at a record pace of 35.9%. Investment in equipment has contracted for five consecutive quarters.
Reporting by Lucia Mutikani; Edited by Paul Simao
Original © Thomson Reuters