US business investment contracts, could stress slowing economy

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US business investment contracts, could stress slowing economy

On Thursday, the 26th of September 2019, US Commerce Department had released a much downbeat depiction of US business spending, while Commerce Dept.’s report had revealed that the US business investment was curbed more sharply over the second quarter of the year than previously estimated and corporate profit margin seemed to be narrowing following a rub out of Trump’s tax incentive package.

While Thursday’s (September 26th) data had added further glooms on a slowing US economy amid US financial markets which had been shivering over fears of a possible recession in a near-term outlook, several analysts had blamed Trump’s tariff war with China behind lesser business spending during Q2, 2019.

Aside from an offbeat business spending and corporate profit outlook threatening United States’ slowing economy, Thursday’s (September 26th) US Commerce Department data had also posed a risk to a record economic expansion of the United States currently in its 11th year.

Meanwhile, citing a slew of uncertainties casting caustic clouds over investors’ sentiment, a business economics professor at Loyola Marymount University in LA, Sung Won Sohn said, “Given the uncertainty in the economy, businesses are very cautious about spending in construction as well as equipment, and this is not a very good sign.

After all, businesses are the ones hiring people, providing income and the buying power for consumers. ” Nonetheless, according to US Commerce Department’s Thursday’s (September 26th) data, US business investments were dropped by 1 per cent in an adjusted basis during last quarter at an annualized rate, much lower than a prior estimate of 0.6 per cent, remarking the sharpest decline on US business spending since Q4, 2015.