New orders for major US warehouses fell unexpectedly in December, including a decline in demand for machinery and primary metals, and pointed to a further decline in corporate spending on equipment that could shrink economic growth.
The Department of Commerce said Thursday Orders for non-prudent capital goods excluding aircraft, a carefully monitored proxy for business spending plans, fell 0.7 percent. The data for November was revised to show that these so-called core capital goods orders fell 1.0 percent instead of falling 0.6 percent as previously reported.
Economists who were asked by Reuters had expected that Tier 1 assets increased by 0.2 percent in December. Orders with main capital goods increased by 6.1
Shipments of Tier 1 capital goods rose 0.5 per cent in December after a unchanged 0.2 per cent decline last month. Core capital goods shipments are used to calculate expenses for expenses in the state's gross domestic product measurement.
While the relinquishment of core capital goods shipments suggests moderate growth in corporate expenditure on equipment in the fourth quarter, surprising fall in orders for weakness in the coming months shows.
The report in December was delayed by a 35-day partial closure of the federal government that ended January 25. The Commerce Department said that "processing and data quality were monitored throughout, and response and coverage numbers were at or above normal levels for this release."
The Mixed Report came to the heels of data last week and showed a steep decline in retail in December, which led economists to cut their GDP growth forecasts for the fourth quarter by much more than 1.2 percentage points to a 1.5 percent annual rate. The economy grew by 3.4 percent in the third quarter.
The decline in corporate spending has been recognized by the Federal Reserve, which has attributed it to uncertain economic prospects, slow global growth, trade tensions, declining fiscal stimuli, and government closure.
On Wednesday, the US Federal Reserve announced on Wednesday that "production contacts in a number of districts indicated that such factors caused them to delay or delay investment costs."  Equipment expenditure has been slow since the second quarter of 2018, despite the white house's $ 1.5 billion tax. Some companies, including Apple, used their tax case to buy back massive-scale shares. A survey last month showed that lower taxes had not led companies to change their employment or investment plans.
In December, orders for machines fell by 0.4 percent. Orders with primary metals fell 0.9 percent. There was also a decrease in orders for electrical equipment, appliances and components. Orders for computers and electronic products remained unchanged.
Total orders for durable goods, goods from toasters to planes that are supposed to last three years or more, increased 1.2 percent in December. It reflected an increase in demand for transport equipment of 3.3 per cent.
Orders for durable goods increased by 1.0 per cent in November.
Orders for cars and parts increased by 2.1 per cent in December. Defense aircraft orders fell 30.5 percent, and civil aircraft orders increased by 28.4 percent. Boeing reported on its website that it had received 218 flight bookings in December, a more than fourfold jump from 51 in November.