US primary goods orders beat expectations in September, according to Reuters
WASHINGTON (Reuters) – New orders for key U.S. manufactured goods rose more than expected in September, but business spending on machinery likely fell in the third quarter.
Orders for non-aircraft non-secured goods, a closely watched proxy for business spending plans, fell 0.5% last month after an unrevised 0.3% gain in August, the Commerce Department's Census Bureau said Friday.
Economists polled by Reuters had forecast orders for so-called core capital goods rising 0.1% after a 0.3% rise previously reported in August. Exports of primary goods fell 0.3% after falling 0.1% in the previous month.
High borrowing costs have been a drag on business investment, although easing financial conditions as the Federal Reserve prepares to cut interest rates boosted spending in the second quarter.
Orders for non-defense goods fell 4.5% after falling 4.4% in August. Exports of these goods fell 3.6% after falling 2.0% in the previous month.
This is sent to the calculation of business expenses in the machinery part of the gross domestic product report. Business investment in services rose at a 9.8% annual pace in the second quarter, contributing to economic growth of 3.0%.
Growth estimates for the July-September quarter are currently as high as an average of 3.4%. The government will publish its first estimate of GDP for the third quarter next week.
