New orders for US factory goods fell by the most in four months in September, signalling weakness in manufacturing amid the protracted US-China trade war.
Factory orders fell 0.6 per cent in September, worse than economists’ expectations for a 0.5 per cent slide, according to a survey by Refinitv. That also marked the second consecutive monthly decline in factory orders.
Meanwhile, new orders for non-defence capital goods excluding aircraft, considered a proxy for business investment, was weaker than initially expected, sliding 0.6 per cent — slightly worse than the initial 0.5 per cent drop.
The report comes amid an apparent thawing in US-China trade relations after US commerce secretary Wilbur Ross over the weekend said he was “quite optimistic” that the remaining obstacles in the first phase of US trade negotiations with China could be overcome soon.
US and Chinese officials are scheduled to meet later this month but uncertainty about a trade deal has complicated the outlook for business’ spending plans. Mid-December remains crucial to markets as that is when new US tariffs on Chinese imports of certain products are set to take effect.
While the Federal Reserve has delivered three rate cuts this year to contend with the fallout from the trade war, chair Jay Powell has signalled the central bank is done easing monetary policy for the time being, pending clearer economic data.