Orders for U.S. business equipment fell in September by the most in seven months, indicating corporate investment is having trouble gaining traction. Bookings for non-military capital goods excluding aircraft dropped 1.2 percent, erasing a 1.2 percent August gain that was stronger than previously reported, Commerce Department data showed Thursday.
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Business investment remained slow in the third quarter as moderating demand and weakness overseas prompted companies to hold back. Even with stability in the oil sector, an inventory correction and growth in consumer spending, manufacturing will probably see little more than a gradual improvement.
“Business investment has been mired in a slump for more than a year and there’s nothing in these numbers to suggest it’s about to break out,” said Omair Sharif, senior U.S. economist at Societe Generale in New York. “It’ll still be a small drag on third-quarter growth.”