Jump In Durable Goods Orders Means Businesses Are Investing Again But The Improvement May Not Yet Be Sustainable

Wednesday, November 28, 2012 07:33
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Jump In Durable Goods Orders Means Businesses Are Investing Again But The Improvement May Not Yet Be Sustainable

Tags: business owners | economic indicators | Economic Outlook

Sales of durable goods were the strongest in five months as reported in October. This means companies are beginning to invest. They’re getting over the fiscal cliff syndrome.

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Non-defense capital goods excluding aircraft are the barometer for business investment and sales were up 1.7% last month, the highest increase since May.
 
Demand is rising and businesses are struggling to meet it despite concern about the economic effects if the US goes over the fiscal cliff.
 
Analysts say demand for goods has stabilized, a positive sign for the economy. Forecasts for total orders ranged from a 4% drop to a 2.7% increase.
 
Demand for computers, engines, and communications gear was reported up after being revised from a larger than forecast negative .4% in September.
 
Orders for electrical equipment and appliances were up 4.1%, the highest since August of last year.
 
Shipments of capital goods was still negative however and may indicate continued weakness in business demand for the remainder of the quarter.
 
The US economy still faces challenges from the fiscal cliff and also from the European economic crisis although European finance ministers announced a deal with Greece they feel is sustainable over the next decade.

 

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