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Title: Demand for U.S. Capital Goods Climbs Most in Three Months in Recovery Sign
Source:
Bloomberg
URL Source: http://www.bloomberg.com/news/2011- ... e-months-in-recovery-sign.html
Published: Sep 28, 2011
Author: Bob Willis
Post Date: 2011-09-28 17:43:42 by Brian S
Keywords: None
Views: 8871
Comments: 6
Orders for U.S. capital goods climbed in August by the most in three months, a sign business investment continues to support the recovery.
Bookings for goods like computers and communications gear, excluding military hardware and aircraft, climbed 1.1 percent, the most since May, a Commerce Department report showed today in Washington. Demand for all durable goods dropped 0.1 percent, less than forecast.
Manufacturers like General Electric Co. (GE) continue to benefit from sales to China, India and other emerging markets even as they face a slowdown in domestic spending. Gains in business investment in the U.S. indicate companies are looking beyond the plunge in stocks and concern over the European debt crisis and are seeking to expand.
“Companies are still willing to continue with their investment intentions despite the recent financial-market volatility,” said Neil Dutta, an economist at Bank of America Corp. in New York. “The risk was always that the recent volatility would prompt a pullback among businesses. At the moment there are no signs of that happening in any meaningful way.”
Economists at Barclays Capital Inc. and JPMorgan Chase & Co. were among those who raised their tracking estimate for third-quarter growth after the figures showed stronger investment and inventory building.
Shares Fall
Stocks dropped amid growing concern that European leaders are divided over how to handle Greece’s debt crisis. The Standard & Poor’s 500 Index fell 2.1 percent to 1,151.06 at the 4 p.m. close in New York. The yield on the benchmark 10-year note rose to 1.99 percent from 1.97 percent late yesterday.
The median projection of 77 economists surveyed by Bloomberg News called for a 0.2 percent decline in total orders. Estimates ranged from a 3.4 percent drop to a 2.7 percent increase.
The August gain in orders for non-defense capital goods excluding aircraft, a proxy for future business investment, followed a 0.2 percent drop in July that was smaller than previously estimated.
Shipments of those items, used in calculating gross domestic product, increased 2.8 percent, the most since March, after rising a revised 0.4 percent gain the prior month. The Commerce Department had originally reported a drop for July.
Tax Break
The business spending that helped lead the economy out of recession in mid-2009 may be further supported by a December agreement between President Barack Obama and congressional Republicans. Companies will be able to depreciate 100 percent of capital equipment put in service by the end of this year.
Total orders were depressed by an 8.5 percent drop in demand for automobiles and parts, the biggest decrease since February 2010, today’s report showed.
Bookings climbed 5.5 percent for computers last month, and increased 7.8 percent for communications gear.
The report may ease concern manufacturing was slumping after recent regional data showed factories cutting back in September. New York-region factories shrank for a fourth straight month and manufacturing in the Philadelphia area contracted for a third time in four months, figures from the Federal Reserve showed.
The Institute for Supply Management’s factory production and orders indexes for August both showed contraction.
Any further weakening in manufacturing would be more of a concern as much of the growth in the second quarter came from corporate investment and trade as consumer spending stagnated.
Overseas Sales
Overseas sales remain a source of strength for some manufacturers, including General Electric.
“At a time of, I would say, global volatility, we still see robust demand for our infrastructure products,” Jeffrey Immelt, chairman and chief executive officer of GE, said Sept. 26 in Pune, India. “We still feel quite good about our prospects on a global basis.”
The Fed’s policy-setting committee on Sept. 21 said economic growth “remains slow” even as “business investment in equipment and software continues to expand.”
“There are significant downside risks to the economic outlook, including strains in global financial markets,” it said.
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Orders for U.S. capital goods climbed in August by the most in three months, a sign business investment continues to support the recovery.
All is well! Our economy is NOT in a Depression!
The GOVERNMENT is in control! Move along, nothing to see!
Baghdad Brian
DUMMY DwarF: ...I'm eating a meatball...
Capitalist Eric: Foreplay before the president's staff?
http://libertysflame.com/cgi-bin/readart.cgi?ArtNum=24347&Disp=35#C35
#2. To: Brian S (#0)
Stocks dropped amid growing concern that European leaders are divided over how to handle Greece’s debt crisis. The Standard & Poor’s 500 Index fell 2.1 percent to 1,151.06 at the 4 p.m. close in New York. The yield on the benchmark 10-year note rose to 1.99 percent from 1.97 percent late yesterday.The median projection of 77 economists surveyed by Bloomberg News called for a 0.2 percent decline in total orders. Estimates ranged from a 3.4 percent drop to a 2.7 percent increase.
All 77 have been wrong on everything since March 09...;}
Bank of New York: A Train Wreck Waiting to Happen? « naked capitalism
“If you think, as banking expert Chris Whalen does, that BofA is a goner by virtue of the odds of very large damages in the various mortgage cases that are in progress, Bank of New York is a goner even faster if (and we really mean when) investors start saddling up to target the bank. The liability of trustees in mortgage securitizations is so obvious and comparatively easy to prove that I am surprised that no one has yet gone after it. However, investors are probably understandably cautious about filing suits that might expose widespread failures of originators and pacakgers to convey mortgage loans to securitizations, which would lead to lots of collateral damage (no pun intended). “
#3. To: All (#2)
In case you hadn’t noticed, especially if you get your news from the MSM, there is the mother of all capitalist crises unfolding around us. A crisis that appears to be far deeper even than the Crash of ’29 and given the global nature of corporate capitalism, nobody (except the rich) can escape its awful destructive power, short of revolution of course."
william bowles-now There's a Leftist. The kind the state looks to kill ASAP...;}
#4. To: All (#3)
So deep in fact, that the imperial elites are incapable of resolving it and appear to be frozen to the spot like a deer caught in the headlights, attempting to apply 'solutions’ that only compound the contradictions. It points once and again to the chaotic nature of capitalism that hides its ignorance behind glib phrases that mean nothing."
#5. To: All (#4)
Fed’s Bernanke said the central bank might need to ease monetary policy further if inflation or inflation expectations fall significantly.
They just can't say 'deflation' if their life depends on it...
#6. To: Brian S (#0)
WOO HOO, happy days are here again! Where do I report for my shiny new high paying shovel ready green job?
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