Data Shows US Capital, Durable Goods Orders Down In September
According to the latest Commerce Department data, orders for nondefense capital goods excluding aircraft declined by 0.3% in September, while orders for durable goods fell 1.2%. Reuters reported that last month’s decline in orders of nondefense capital goods followed a downwardly revised drop of 1.6% in August. Reuters-polled economists had expected core capital goods to be unchanged after the previously-reported 0.8% decline in August. However, manufacturing has been hindered by a strengthening dollar as well as continued declines in spending in the energy sector. Bloomberg News reported that a median estimate from economists “for orders for non-defense capital goods excluding aircraft, a proxy for future business investment in items like computers, engines and communications gear, called for a 0.2% gain” in September. The report found shipments of such goods increased 0.5% in September following a 0.8% decline in August. However, “bookings for machinery, transportation equipment and computers fell in September.” Among this decline was “a 35.7% slump in bookings for commercial aircraft” in September. The AP reported that while commercial aircraft orders saw a steep decline, autos and auto parts saw a 1.8% increase in September orders, proving to be a bright spot for the month. Machinery orders were down 1.3% while primary metal demand fell 2.9% and computer orders fell 4.5%.
What This Means For Small Businesses
Bloomberg News reported that in September, “tepid global markets gave American companies little reason to expand.” The latest Commerce Department data suggest there is some uneven growth on the path towards a full economic recovery, and that some sectors, particularly manufacturing, may be facing particular challenges. Small businesses in the manufacturing sector in particular are likely to continue to see anemic growth in the near future without help addressing these broader policy issues.
Additional Reading
NFIB previously reported on durable goods spending.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
