"The figures reflect "a pretty soft global demand environment and still not incredibly strong domestic demand conditions"
- Sean Incremona, a senior economist at 4Cast Inc.
Demand for big-ticket U.S. goods sank the most since August 2012, raising concerns manufacturing will be slow to strengthen. On Monday the Commerce Department said bookings for goods meant to last at least three years tumbled 7.3% in August, after a 3.9% gain a month earlier. This month's drop follows three consecutive months of gains, reflecting the latest rumours pointing to an early curbing of the Federal Reserve's asset-purchase programme have taken their toll. Moreover, core durable goods, which exclude transportation category, fell 0.6%, down from a 0.1% increase in the preceding month and missing analysts' expectations for a 0.5% growth. The proxy for future investment, the number of non-defence orders omitting aircrafts, plunged 3.3% after rising 1.3% in the prior month.
The struggling manufacturing sector account around 12% of the economy, however, the reports are showing slowdown in overseas markets as well as the effects of federal government spending cuts, which are all lingering and holding back manufacturers from increase in spending. Nonetheless, stabilization in the labour market and sustained demand for property and automobiles should help spur manufacturing production through the rest of the year.
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