U.S. demand for big-ticket manufactured goods unexpectedly weak in December.
January 28, 2004: 8:33 AM EST
WASHINGTON (Reuters) - New orders for long-lasting U.S. goods were unchanged in December, the government said Wednesday in a weaker-than-expected report raising questions about the strength of the manufacturing recovery.
The Commerce Department said orders were flat in December after falling a revised 2.3 percent the previous month. Analysts had been expecting a solid increase of 2 percent.
A broad range of categories suffered from weaker demand. Non-defense capital goods excluding aircraft orders -- seen as a proxy for business spending -- fell 0.4 percent.
Economists believe a sustained pickup in business spending is crucial for a long-lasting economic recovery.
Orders of computers and electronic products fell 2.7 percent and orders for fabricated metal goods fell 0.8 percent.
Helped by strong demand for cars and aircraft, a 1.4 increase in demand for transportation equipment was a bright spot in the report. Excluding transportation, orders were down 0.7 percent.
For 2003 as a whole, new orders rose 2.8 percent, the first calendar-year increase since a 3.3 percent rise in 2000. New orders fell 1.9 percent in 2002.
The disappointing report will likely reinforce expectations that the Federal Reserve will leave interest rates on hold at a 45-year low of 1 percent when it meets on Wednesday to discuss monetary policy.
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