By Michelle Jamrisko and Alex Kowalski
WASHINGTON - Demand for goods such as machinery and electronics climbed more than forecast in November, showing U.S. companies are planning to expand next year as they look beyond the tax increases and spending cuts slated to take effect.
Orders for durable goods increased 0.7 percent last month after a 1.1 percent gain in October that was larger than previously estimated, the Commerce Department reported today in Washington. The advance exceeded the median forecast of economists surveyed by Bloomberg that projected a 0.3 percent rise. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, climbed for a second month.
Companies may be more willing to invest as global growth stabilizes and American consumers keep spending, unfazed by the deadlocked discussions on fiscal policy. Manufacturers such as Comtech Telecommunications Corp. are looking for clarity from Washington to spur a rebound in government orders.
“The worst of the capital spending slowdown is over,” Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before the report. “Pent-up demand is building up right now. Once the uncertainty about the fiscal cliff is over, we’ll see the pent-up demand being released. The economy should pick up momentum next year, in part driven by capital spending.”
Forecasts for total durable goods of the 63 economists surveyed by Bloomberg ranged from a 2.6 percent drop to a 3.3 percent increase.
Another report today showed consumer spending climbed in November as Americans pushed aside the threat of higher taxes next year, buying gifts for the holidays and making up for shopping lost to superstorm Sandy.
Purchases increased 0.4 percent last month after a 0.1 percent drop in October that was smaller than previously estimated, Commerce Department figures showed. The gain matched the median forecast of 80 economists surveyed by Bloomberg. Incomes rebounded after being depressed in October by lost wages due to superstorm Sandy.
Stock-index futures held earlier losses after the reports after House Republican leaders canceled a planned vote on higher taxes for top earners, sending budget talks deeper into turmoil. The contract on the Standard & Poor’s 500 Index maturing in March fell 1.5 percent to 1,419.6 at 8:34 a.m. in New York.