Business investment stalls in September
Source: Agencies |
October 26, 2012, Friday
|
Print Edition
Print Edition
BUSINESS investment showed signs of stalling in September, an indication that worries over a possible sharp tightening in the federal budget are already weighing on the US economy.
Other data yesterday showed the number of Americans filing new claims for jobless benefits fell last week, a fresh sign the labor market is slowly healing.
New orders for capital goods outside defense and excluding aircraft - a proxy for business spending plans - were flat last month at US$60.3 billion, US Commerce Department data showed. Analysts polled by Reuters had expected a modest gain.
The reading highlighted concerns that companies are holding back investments due to fears the US Congress could fail to avert sharp tax hikes and spending cuts in 2013, which threaten to bring recession back.
"The slowdown in business fixed investment during the second half of the year is even more pronounced than feared," said Harm Bandholz, an economist at UniCredit in New York.
Shipments of non-defense capital goods other than aircraft, which go into the government's estimates for economic growth, fell for the third straight month. As a result, JPMorgan cut its estimate for third-quarter economic growth by two tenths of a point to a 1.6 percent annual rate.
The investment readings were part of a larger report that showed orders for long-lasting factory goods last month posted their biggest gain since January 2010. However, the rise was fueled by a spike in volatile aircraft orders and failed to make up ground lost in August.
Manufacturing has been a major driver of the recovery from the US' 2007-09 recession, but now is beset by softer demand at home and abroad. The European debt crisis has suppressed orders at factories around the world, from China to the US and Latin America.
The US economy remains hobbled by a persistently high jobless rate.
Other data yesterday showed the number of Americans filing new claims for jobless benefits fell last week, a fresh sign the labor market is slowly healing.
New orders for capital goods outside defense and excluding aircraft - a proxy for business spending plans - were flat last month at US$60.3 billion, US Commerce Department data showed. Analysts polled by Reuters had expected a modest gain.
The reading highlighted concerns that companies are holding back investments due to fears the US Congress could fail to avert sharp tax hikes and spending cuts in 2013, which threaten to bring recession back.
"The slowdown in business fixed investment during the second half of the year is even more pronounced than feared," said Harm Bandholz, an economist at UniCredit in New York.
Shipments of non-defense capital goods other than aircraft, which go into the government's estimates for economic growth, fell for the third straight month. As a result, JPMorgan cut its estimate for third-quarter economic growth by two tenths of a point to a 1.6 percent annual rate.
The investment readings were part of a larger report that showed orders for long-lasting factory goods last month posted their biggest gain since January 2010. However, the rise was fueled by a spike in volatile aircraft orders and failed to make up ground lost in August.
Manufacturing has been a major driver of the recovery from the US' 2007-09 recession, but now is beset by softer demand at home and abroad. The European debt crisis has suppressed orders at factories around the world, from China to the US and Latin America.
The US economy remains hobbled by a persistently high jobless rate.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
