According to data released by the Commerce Department US capital goods are experiencing a rebound despite the economic concerns of an impending fiscal cliff.
Although orders for all durable goods were little changed from September economists participating in a Bloomberg news survey had forecast a decline of 0.7 per cent. Meanwhile, demand for goods including electronics and machinery experienced its most significant jump for five months.
While machinery bookings increased 2.9 per cent, orders for electrical equipment were up by 4.1 per cent and orders for communications gear also grew by a substantial 11.4 per cent.
An economist with HSBC securities commented of the news: ‘Demand for durable goods has stabilized. It’s a positive sign.’
However, other industry experts have urged caution. Last week chief financial officer Rajesh Kalathur stated: ‘The world faces some big economic challenges today, ranging from the US fiscal cliff possibilities to the euro debt crisis and the slowdown in emerging market economies. Today’s economic uncertainties are real and troubling.’
But it wasn’t all good news. Capital goods shipments dropped for a fourth consecutive month in October, declining 0.4 per cent whilst the purchase of equipment and software lingered at its weakest level for over 36 months.
The Commerce Department figures also showed that during the third quarter businesses slashed spending as a result of a drop in commercial construction projects.
As of 15:20 pm
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