"The worst of the capital spending slowdown is over"
- Bandholz, chief U.S. economist at UniCredit Group
Demand for long-lasting manufactured goods rose more than expected last month, a sign U.S. companies are planning to expand in the next year. According to the Commerce Department, the number of orders for durable goods jumped 0.7% last month after a 1.1% gain in October, beating analysts' expectations of a 0.3% increase. At the same time, consumer spending in the world's largest economy added 0.4% last month after a 0.1% drop in October, as Americans pushed aside the threat of higher taxes next year. The improvement in data signals that companies are showing more willingness to invest, despite the possible tax increases and spending cuts.
"The worst of the capital spending slowdown is over," Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before the report. "Pent-up demand is building up right now. Once the uncertainty about the fiscal cliff is over, we'll see the pent-up demand being released. The economy should pick up momentum next year, in part driven by capital spending."
"The ongoing paralysis in Washington continues to make the receipt of orders a challenge" said Fred Kornberg, chief executive officer of Melville, New York-based Comtech Telecommunications. "
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