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Business Spending Drops In December Says Commerce Department

Business Spending Drops In December Says Commerce Department
Michael Copeland
Written by Michael Copeland

Orders for durable goods have got a boost from auto and airplane sector.

However, other areas in the manufacturing segment have been weak in December. Business investment has been declining most, towards the tail end of the year.

The government report has shown that order for durable goods in the U.S. has gone up by 1.2 percent in December. However, for the entire year, investments have shown a healthy improvement by 6.1 percent.

The report released by the government was a bit late due to the partial shutdown, which has hampered activities everywhere.

Though the data is positive, orders are placed only on cars and planes. There is no significant order in any other area, which has shown a tepid increase by 0.1 percent.  Orders in other areas of the industrial sector such as primary metal, machines, electrical equipment, and networking have been almost negligible.

Business investment has slipped to 0.7 percent for the month of December. Once again the reason pointed out is the trade dispute between China and the U.S. which is taking its toll on the two countries and has become a global issue too.

The threat that a recession may happen cannot be wiped away. The supply chain that has been affected by the trade war continues to torment the U.S. economy. Further, there are some political conflicts in Washington that still poses a threat.

High investments indicate that the economy is doing well. However, lower data does not speak well for the economy, as factories and consumer spending depend on investments and industrial progress.

The Commerce Department has reported a 0.7 percent drop in non-defense capital goods. This is important data that shows plans for business spending. Order for core capital goods has increased by 6.1 percent year-on-year.

Core capital goods which are watched for equipment spending have risen 0.5 percent.

Earlier the retail sales have shown a sharp decline in December.

About the author

Michael Copeland

Michael Copeland

Michael Copeland is one of the most experienced Content Writer as well as one who handles the team in our organization with an experience of over 5 years. He scripts everything related to the invention, discoveries, and breakthroughs concerning the field of Health. In spare time, Michael likes to work in skits and acts that try to spread awareness about health-related topics as well as provides lectures about content writing & content management.

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