US Durable Goods Orders Decline

Date: November 01, 2016

September Orders Down 0.1%, Commerce Department Reports

The latest Commerce Department data shows that in September, US durable goods orders fell 0.1% to $227.3 billion. Most of the decline was due to a 0.8% decrease in orders for transportation equipment. Reuters reported that non-defense capital goods orders excluding aircraft, viewed as a proxy for business investment plans, “fell 1.2 percent after three straight months of strong gains,” including a 1.2 percent increase in August. Shipments of core capital goods “rose 0.3 percent last month after being unchanged in August.” Bloomberg News reported that the drop in capital equipment orders indicates “corporate investment is having trouble gaining traction.” Despite last month’s decline, capital goods “bookings over the three months ended in September rose at a 5.2 percent annualized pace, indicating the worst of the investment slump is over.” US News & World Report reported the decline was a surprise, as it followed two consecutive months of increased orders. The data indicate that America’s manufacturing sector is continuing to struggle to build momentum, US News said. The Wall Street Journal said that the report showed a mixed outlook for manufacturers, who have struggled amid a weak global economy. The Journal adds that a new orders for defense aircraft fell 44.8% and also declined for fabricated metal products and computer and electronic products. However, new orders for motor vehicles and parts saw an increase for the second straight month, showing stable consumer spending.

What This Means For Small Businesses

The latest Commerce Department data is an indication of continued weakness in the overall economy. Small business owners looking for reassurance of economic improvement are likely to be disappointed with these latest numbers.

Additional Reading

The AP also covered the story.

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.

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