Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.2 percent. It was the steepest drop since February and followed three straight months of strong gains. Economists polled by Reuters had forecast a 0.3 percent increase in September.
Such spending remains 3.9 percent lower so far this year than in the same period a year ago. But several economists said the bottom for these core capital goods has already been reached, particularly in the oil and gas sector, with more gains ahead.
“The underlying trend is beginning to rise… but we had hoped for a bit better in September,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told The Wall Street Journal. “The upward trend should re-emerge in the October data.”
As the WSJ reports, a lack of business investment has been a major drag on the U.S. economy’s growth in recent years.
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