Orders for U.S. Goods Excluding Transportation Unexpectedly Drop

(Bloomberg) Demand for U.S. durable goods other than transportation equipment unexpectedly dropped in August for a third consecutive month, signaling that slowdowns in business investment and exports will further restrain the economic recovery.

Orders for goods meant to last at least three years, excluding volatile demand for such things as airplanes and automobiles, fell 1.6 percent last month after a greater-than- previously estimated 1.3 percent decrease in July, the Commerce Department reported today in Washington. Total bookings plunged 13 percent, the most since January 2009, paced by a decline in demand for civilian aircraft.

Manufacturing, once a pillar of the economic recovery, has cooled, hurting companies such as Caterpillar Inc. as concern about the fiscal cliff of tax increases and government spending cuts that may take effect next year causes businesses to pull back. Slowing growth from Europe to China also is putting a dent on exports, another headwind for American factories.

“There was broad-based weakness,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “What this now means is that capital expenditures are now going to probably fall for the first time since the recovery started. It remains a terribly challenging backdrop in the U.S.” ................(more)

The complete piece is at: http://www.bloomberg.com/news/2012-09-27/orders-for-u-s-capital-goods-signal-business-spending-slowdown.html