Orders to U.S. factories for big-ticket manufactured goods slowed significantly in September, while a key category that tracks business investment fell for a second straight month.
Demand for durable goods edged up a slight 0.8 percent in September, a sharp slowdown from a 4.6 percent jump in August, the Commerce Department reported Thursday. The swing was heavily influenced by the volatile aircraft category, which fell 17.5 percent in September after having surged 63.7 percent August.
The category that serves as a proxy for business investment dipped 0.1 percent in September following a 0.2 percent fall in August.
The recent weakness in investment orders has raised concerns about whether a growing trade war with China and stock market volatility were making businesses more cautious.
The government will provide its first estimate of overall economic growth in the July-September quarter on Friday.
Economists are projecting that the growth in the gross domestic product slowed to an annual rate of 3 percent in the third quarter after a sizzling 4.2 percent annual growth rate in the April-June quarter, the best in nearly four years.
Still, economists believe that annual GDP growth should come in around 3 percent for the full year, the best performance in 13 years. President Donald Trump often cites the GDP gains as evidence that his economic policies are working. But many private economists believe the support from the $1.5 trillion tax cut passed by Congress last December will start to fade next year.
The durable goods report showed that demand for autos was up a solid 1.3 percent, while demand for military aircraft rose 119.1 percent but orders for commercial aircraft fell.
Overall, transportation orders were up 1.9 percent. Excluding transportation orders, durable goods were up a tiny 0.1 percent after a 0.3 percent gain in August.
Orders for machinery increased 0.8 percent while demand for primary metals such as steel rose 0.1 percent. Demand for computers fell 0.4 percent while orders for communication equipment slipped 0.1 percent.
In a separate report, the Labor Department said that new applications for unemployment benefits rose 5,000 last week to a still-low 215,000. Benefit applications, which are a proxy for layoffs, had been down by 5,000 in the previous week.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.