Bloomberg (07/25/14) Jeanna Smialek
Orders for U.S. business equipment increased in June following a revised decline in May, suggesting that corporate investment is in a “stop-and-go” pattern that could temper economic expansion. Bookings for nonmilitary capital goods excluding aircraft rose 1.4% after a 1.2% decline in the prior month, according to the U.S. Department of Commerce. Demand for all durable goods rose 0.7%. The 82 economists surveyed by Bloomberg forecast that total durable goods orders would increase 0.5%.
Companies are waiting to boost capacity until they believe demand can be sustained. “We’ve seen that businesses have been a bit more willing to increase their workforce this year, but capital investment decisions are based on longer-term expectations for final demand, and I think that businesses are probably going to remain cautious for now,” says Ryan Wang, an economist at HSBC Securities USA Inc.
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