US business equipment orders decline again

Bloomberg

Orders placed with US factories for business equipment declined for a second straight month and shipments matched the biggest drop since 2016, the latest sign the dimmer global growth outlook and trade tensions with China are weighing on companies.
The proxy for business investment — bookings for non-military capital goods orders excluding aircraft — fell 0.5% in September after a downwardly revised 0.6% drop the prior month, according to Commerce Department figures that missed estimates. The broader measure of bookings for all durable goods, or items meant to last at least three years, declined 1.1%, the most since May and also below forecasts.
A separate report from the Labor Department showed initial unemployment claims fell slightly to 212,000 in the week ended on October 19, indicating the labor market remains generally tight. Overall, the level remains close to a half-century low as fewer people seek jobless benefits.
The sustained weakness in orders adds to signs of malaise in business investment and potentially bolsters the case for a third straight Federal Reserve interest-rate cut, a move that traders expect from policy makers next week. “There’s a lot of uncertainty hanging over manufacturing and softness in the global economy,” said Ryan Sweet, head of monetary-policy research at Moody’s Analytics Inc.
Even so, “this expansion can go on without a large contribution from manufacturing” given that it’s a relatively small part of the economy, Ryan Sweet said in his report.
A preliminary purchasing managers index from IHS Markit showed US factory activity actually improved slightly in October for 2nd month though remained relatively subdued.