Durable Goods Orders Drop as U.S. Shutdown Hurts Confidence
Source: Bloomberg
Nov. 27 (Bloomberg) -- Orders for U.S. durable goods dropped in October, reflecting a broad-based retreat and signaling the government shutdown hurt business confidence.
Bookings for goods meant to last at least three years decreased 2 percent, matching the median forecast of economists surveyed by Bloomberg, after a 4.1 percent gain in September that was larger than initially reported, the Commerce Department reported today in Washington. Orders for aircraft and capital goods, such as machinery and computers slumped.
The 16-day partial federal shutdown last month combined with continuing budget cuts have prompted companies such as Lockheed Martin Corp. to trim staff and close factories, which will weigh on growth. A lack of a rebound in bookings this month will mean businesses are unwilling to investment in expanding amid concern the economic expansion won’t accelerate in 2014.
“One would expect a bit more trepidation on the part of businesses” at the time of “heightened uncertainty” emanating from Washington, said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York. “Once we get more fiscal clarity, which is likely to come in the next few months, we’re likely to see a much more favorable backdrop for hiring and investment.”
Read more: http://www.sfgate.com/business/bloomberg/article/Durable-Goods-Orders-Drop-as-U-S-Shutdown-Hurts-5016348.php
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