US durable goods suffer amid trade war, GM row

SALES of major US-made manufactured goods had a dismal September, hit hard by Boeing’s woes and a protracted work stoppage at General Motors (GM), a government data report said on Thursday.

And even outside the volatile transportation sector, a key measure that economists watch for signs of business confidence, fell for the second month in a row, the Commerce Department reported.

It was more bad news for the US manufacturing sector, the weakest link in the slowing US economy, battered by a slump in foreign demand and the Sino-US trade war.

Total new orders for US durable goods, those big-ticket items intended to last three years or more, fell 1.1 per cent last month to $248.2 billion, which was about as bad as economists expected.

The result meant 2019 so far has been a year to forget, with sales in the first nine months of this year 0.8 per cent lower than the in same period last year.

The largest part of the damage last month was done by the transportation sector, with autos and parts falling 1.6 per cent and civilian aircraft falling another 11.8 per cent, extending August’s decline.

But economists note the bad news was exaggerated by the GM strike and Boeing’s troubles.

GM has reached a contract agreement with the United Automobile Workers union last week, and voting among unionised autoworkers on whether to approve a deal is expected to conclude on Friday, more than a month after the work stoppage began.

When Boeing’s popular 737 MAX passenger plane will be allowed to fly again remains an open question, however, following two deadly accidents.

But Boeing recently booked sales of military tanker aircraft to the US Air Force. Defence aircraft sales were rose a modest 6.3 per cent, according to Commerce Department data.

Outside the transportation sector, which sees big swings from month to month, sales fell 0.3 per cent, matching expectations.

Fabricated metal goods, a sector hit hard by US President Donald Trump’s tariffs on steel and aluminium imports, fell 1.5 per cent, giving up gains posted in August.

And computers and electronic products, also the victim of tariffs, fell for the third straight month, according to the report.

Meanwhile, “core” capital goods sales, which excludes aircraft and defence items, dropped 0.5 per cent – the second consecutive decline. Economists say that data point tracks oil prices and business investment and serves as an indicator of corporate America’s confidence in the near future.