Durable Goods Orders in U.S. Decrease for Second Month
Source: Bloomberg
A slowdown in global growth, resulting in plunging commodity prices, is prompting U.S. companies to say the glass is half empty. American consumers see it as half full.
Orders (CGNOXAI%) to American factories for long-lasting equipment unexpectedly dropped 1.3 percent in September, indicating businesses worldwide are reluctant to spend on expanding output, Commerce Department data showed today in Washington. Consumer confidence this month jumped to a seven-year high, according to figures from the Conference Board.
As markets in Europe and emerging nations cool, companies will want to see signs that sales are holding up before making expensive investments to modernize plants. As long as hiring doesn’t also wane, the lowest gasoline prices in four years and falling borrowing costs mean household sentiment will probably keep improving, laying the groundwork for gains in spending.
“We’re all wondering if businesses are spooked by what’s happening in the euro zone,” said Beth Ann Bovino, chief U.S. economist at Standard & Poor’s in New York. “The drop in oil prices, which means a drop in gas prices, means more purchasing power. That makes me happy.”
Read more: http://www.bloomberg.com/news/2014-10-28/durable-goods-orders-in-u-s-decrease-for-second-straight-month.html