US durable goods fell further underlying the weakness within the economy with analysts pointing to the government shutdown with may or may not hurt business confidence.
Bookings for goods that are meant to last three years or more dropped two percent and came inline with median forecasts. This came far short of the 4.1 percent gain seen in September, according to the Commerce Department. A lack of bookings is an indication that businesses are hesitant to invest or expand during these times of economic uncertainty.
Orders, ex-transportation, declined a tenth of a percent opposed to the .2 percent gain in the previous month. Including transportation, bookings are lower three of the last four months with commercial aircraft down 15.9 percent in October. October’s drop followed a massive, maybe an outlier, 59.2 percent gain in September. For instance, Boeing reported 79 aircraft bookings in October versus 127 in September.
Non-defense capital goods demand fell 1.2 percent, and shipment for these products declined .2 percent in October.
The largest US government contractor, Lockheed Martin, is reported to cut 4K jobs and close select operations due to the cut in federal spending.
Lockheed Martin’s CEO Marillyn Hewson said “in the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business and will position Lockheed Martin to better serve our customers.” Unfortunately, it does nothing for the 4K employees that are soon to be unemployed.