US core capital goods orders rise for eighth straight month, allay recovery concerns



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US core capital goods orders rise for eighth straight month, allay recovery concerns

US Commerce Department had issued a statement earlier on Wednesday saying that the new orders for US-borne capital goods rose for an eighth straight month in a row in December, suggesting a solid growth momentum in business expenses on equipment over the fourth quarter which would more likely to allay concerns over the pace of a recovery from the pandemic-driven slump.

Besides, according to US Commerce Department data for US core capital goods orders, the non-defence capital goods’ orders, a closely observed indicator for future business investment plans, soared by 0.6 per cent in December excluding aircraft, portraying a pluperfect business environment for the US economy.

Aside from that, in the latest flashpoint of a growing debate about the course of a US economy in a medium- to longer-term outlook, the so-called core capital goods orders ascended 1.0 per cent in November on an adjusted basis which has been well in alignment with the analysts’ expectations, while core capital orders for US-borne goods shot up by 1.8 per cent in December compared to the same time a year earlier as a pandemic-era global economy seemingly had transmogrified a shift in demand towards sectors such as motor vehicles, medical equipment and electronics instead the high-profit margin travel and entertainment industry.

Shipments of core capital goods rise 0.5 per cent in December

In factuality, the US Commerce Department’s data on new orders for US core capital goods came forth shortly before the US Fed’s Powell had flagged concerns over the pace of an economic recovery, nonetheless, latest upbeat data on orders for US-borne core capital goods in December coupled with an uptick in manufacturing activities and a robust housing market in January released earlier this week, would more likely to offset frets over a slowdown in US economy.

Nonetheless, while several analysts were quoted saying that the pace of recovery in US economy would more likely to be catalysed by a sustenance of a riant factory activity amid a sharply slowing labour market alongside a higher lay-offs in December, orders for US-made durable goods and motor vehicles were picked up by 1.0 per cent and 1.4 per cent respectively, said the US Commerce Department.