Reuters
FILE PHOTO: A production line employee works at the AMES Companies shovel manufacturing assembly line in Camp Hill
- Orders for long-lasting products made in the US unexpectedly posted its steepest drop in six months in November.
- The Commerce Department said Monday orders for durable goods fell a seasonally adjusted 2% from a month earlier.
- That was the largest decline since May and far off from consensus estimates.
- Visit Business Insider's homepage here.
Orders for long-lasting products made in the US unexpectedly posted its steepest drop in six months in November as demand for military equipment declined sharply.
The Commerce Department said Monday orders for durable goods fell a seasonally adjusted 2% from a month earlier. That was the largest decline since May and far from consensus estimates.
Economists predicted that the end of the General Motors strike would help boost orders of durable goods - those designed to last at least three years - by 1.2%.
Reduced demand for defense capital goods drove the decline in November, plunging more than 35%. Excluding that category, durable goods orders rose 0.8%. But a key proxy for business investment - new orders for nondefense capital goods excluding aircraft - barely budged last month.
The manufacturing sector, which fell into a mild recession this year, showed signs of stabilizing this month. But against a backdrop of a cooldown abroad and a global trade war, business investment has contracted for two straight quarters.
The US and China have announced a phase-one agreement that suspended planned escalations. Still, tariffs remain on a majority of products traded between the two largest economies. That has raised costs for businesses, disrupted supply chains and cast uncertainty on the outlook.