The latest U.S. data pointed to a cooling economy as business investment stalled, housing remained weak and jobless claims climbed to a four-month high.
The Commerce Department said orders for non-defense capital goods excluding aircraft, a key gauge of business spending plans, were flat in October after a downwardly revised 0.5 percent decline in September. Reuters economists had expected a 0.2 percent increase. Core capital goods orders were still up 6.4 percent from a year earlier.
Shipments of those goods, which feed into the government’s calculation of equipment spending in gross domestic product, rose 0.3 percent in October after a revised 0.2 percent fall in the prior month. The earlier September reading had been reported as a 0.1 percent decline.
Weakness was broad-based inside the report. Orders for primary metals and machinery fell, while gains in fabricated metal products, computers and electronic products, and electrical equipment, appliances and components helped limit the damage.
Economists said the numbers added to concerns that higher borrowing costs and trade tensions were weighing on companies. Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said businesses were becoming more cautious about domestic growth, trade conflicts and future trade relationships, and may be less willing to increase investment.
Chris Rupkey, chief economist at MUFG, said: “The economy may have seen its best day already for growth and prosperity back a couple of months ago in late summer,” and added: “Winter is coming for the economic outlook where business investment spending looks to be topping out, and companies have let a few workers go.”
A separate report from the National Association of Realtors showed existing home sales rose 1.4 percent in October to a seasonally adjusted annual rate of 5.22 million units. Even so, sales were 5.1 percent below October 2017, the sharpest 12-month drop since July 2014.
The housing figures followed Tuesday’s data showing a second straight monthly decline in single-family homebuilding in October. Reuters also noted that a file photo from May 23, 2016, showed a “for sale” sign outside a single-family house in Garden City, New York, underscoring the long-running strain in the housing market.
On the labor front, the Labor Department said initial claims for state unemployment benefits rose by 3,000 to a seasonally adjusted 224,000 for the week ended Nov. 17, the highest level since the end of June. The prior week was revised to show 5,000 more applications than first reported, and economists had expected claims to ease to 215,000.
The four-week moving average increased by 2,000 to 218,500. Because the claims data covered the survey week for November’s employment report, economists said it suggested some moderation in hiring after October payrolls rose by 250,000 and the unemployment rate held near a 49-year low of 3.7 percent.
Markets reflected the mixed tone. The dollar weakened against a basket of currencies, Treasury prices fell and Wall Street shares recovered after a sharp two-day selloff.
Analysts said the Federal Reserve was likely to face closer scrutiny as it prepared for an expected December rate increase, its fourth of the year. The policy debate was also being shaped by slower global growth, the Trump administration’s $1.5 trillion tax cut, and the impact of tariffs and the trade war with China on business investment.
Brent crude, meanwhile, had fallen about 28 percent since early October, adding another drag on equipment spending prospects.
In a separate Reuters reference image from 2016, a “for sale” sign was seen outside a home in Garden City, New York, a reminder of the housing market backdrop that continued to weigh on sentiment. The broader picture, Reuters reported, was one of softer investment, a fragile housing recovery and a labor market that was still solid but showing signs of easing.
