A LB Steel LLC's employee manufactures a component for new Amtrak Acela trains built in partnership with Alstom in Harvey, Illinois December 4, 2019. — Reuters pic
Even if business confidence were to improve in early 2020, a surge in capital expenditure is unlikely. Boeing announced last week it would suspend production of its best-selling 737 MAX jetliner in January as fallout from two fatal crashes of the now-grounded aircraft drags into 2020. Boeing yesterday ousted Chief Executive Dennis Muilenburg.
These so-called core capital goods orders rose by an unrevised 1.1 per cent in October. Economists polled by Reuters had forecast core capital goods orders gaining 0.2 per cent in November.The US dollar held near a two-week high against a basket of currencies, while US Treasury prices slipped. Stocks on Wall Street were trading higher, with Boeing shares surging following Muilenburg's ousting.Shipments of core capital goods dropped 0.3 per cent last month.
October's sales pace was, however, revised down to 710,000 units from the previously reported 733,000 units. New home sales are volatile on a month-to-month basis because they are drawn from a small sample of houses selected from building permits. Sales jumped 16.9 per cent from a year ago. Boeing's biggest assembly-line halt in more than 20 years is expected to disrupt supply chains, further depressing manufacturing, which accounts for 11 per cent of the economy. Economists estimated the suspension of the 737 MAX aircraft production could cut first-quarter 2020 gross domestic product growth by at least half a percentage point.
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