On Friday, US Commerce Department data had unveiled that new orders for US-borne factory goods surged more than anticipated in October, raising hopes of a potential bounce back in US business spending on equipment, a crucial indicator to future investments that contracted on third quarter following four straight quarters of double-digit gains.
If truth is to be spoken, although, latest Commerce Department data had underscored a brightening up of outlook in US factory activities that accounted for an 11.9 per cent of entire economic activities in the United States, demands of US-borne factory goods have still been propelled higher by a robust customer appetite even as a large chunk of consumer spending had shifted back to services.
Nonetheless, an ongoing shortage in raw materials alongside a supply chain constraint could add to further stain on a much-squeezed US labor market, which seemed to be closing in on a maximum employment according to Friday’s US nonfarm payrolls data.
However, orders for US-borne factory goods had soared 17.1 per cent compared to the same time a year earlier in October, as analysts had forecasted a sharp rebound in US business borrowing for equipment over fourth quarter of 2021 which in effect would eventually seal off a strong wind-down of the year.
Orders for US-borne factory goods surge
According to US Commerce Department data released on Friday, orders for US-borne factory goods surged 1.0 per cent in October, while September data was revised higher to a gain of 0.5 per cent compared to a 0.2 per cent estimated initially.
On top of that, US businesses’ factory goods’ inventories gained 0.8 per cent in October, vindicating prospects of a record holiday quarter sales this year. Orders for non-defense capital goods in November, in tandem, a critical gauge to future business spending plans, was revised 0.7 per cent higher from an initially estimate of 0.6 per cent.