US economy

US business investment gauge falls for second month


A major US business investment gauge fell for a second consecutive month in December in the latest sign that the recent weakening of the US economy is proving sticky.

Non-defense capital goods orders excluding aircraft, which is used by analysts as a proxy for investment in big-ticket items, fell by 0.7 per cent in December from the previous month.

November’s decline — previously put at 0.6 per cent month-on-month — was also sharper than thought, according to the latest data from the US Commerce Department. The metric actually fell 1 per cent.

Analysts had expected a rise in both November and December, before the original data were published. For the latest month, they anticipated an increase of 0.2 per cent, according to a poll by Reuters. The gauge has now fallen for four of the past five months.

Demand for durable goods, which are items such as washing machines and cars, climbed 1.2 per cent in December — still lower than the 1.5 per cent analysts had anticipated.

The decline in business investment comes amid mounting fears the US-China trade war is having a real impact on the global economy.

Officials from the European Central Bank noted the hostile international trade climate “appeared to be exacting an increasing toll on the world economy”, according to minutes of their January rate-setting meeting published on Thursday.

Another gauge of US manufacturing activity, industrial production, declined for the first time in eight months at the start of this year, according to data published last week.

Only a week remains until the March 1 tariff deadline for the US and China to strike a deal.



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