WASHINGTON- New orders for US-made goods fell more than expected in September and business spending on equipment was slightly weaker than initially thought, suggesting that manufacturing remains soft amid the ongoing US-China trade war.
Factory goods orders declined 0.6 percent after dipping by an unrevised 0.1 percent in August, the Commerce Department said on Monday. Economists polled by Reuters had forecast factory orders would drop 0.5 percent in September.
Factory orders fell 0.3 percent compared to September 2018. Shipments of manufactured goods declined 0.2 percent in September after decreasing 0.3 percent in the prior month.
Pointing to underlying weakness in the sector, which accounts for about 11 percent of the economy, unfilled orders at factories were unchanged after edging up 0.1 percent in August. Inventories rose 0.3 percent in September after dipping 0.1 percent in August.
Manufacturing has been hobbled by a 16-month trade war between the United States and China, which has also caused a drop in business investment. US and Chinese negotiators have been racing to finalize a text of a ‘phase one’ agreement between the world’s two largest economies.
A critical date is Dec. 15, when new US tariffs on Chinese imports such as laptops, toys and electronics are set to kick in.
Transportation equipment orders dropped 2.8 percent in September after increasing 0.2 percent in August. Orders for civilian aircraft and parts dropped 11.8 percent after declining 17.2 percent in the prior month.
Orders for computers and electronic products fell 1.2 percent but orders for electrical equipment, appliances and components rose 0.7 percent. Machinery orders edged up 0.2 percent in September after decreasing 0.3 percent in August.
The Commerce Department also said September orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, dropped 0.6 percent instead of the 0.5 percent drop reported last month.
Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, declined 0.7 percent in September, the same as previously reported. Business investment declined at its steepest pace in more than 3-1/2 years in the third quarter. – Reuters