New orders for U.S. manufactured capital goods fell in November and the prior month’s increase was revised sharply lower as the drag on manufacturing from a strong dollar and spending cuts in the energy sector showed little sign of abating.
But the outlook for the economy remains encouraging, with other data on Wednesday showing consumer sentiment at a five-month high in December and personal income rising for an eighth straight month in November. That should support consumer spending and generate enough economic growth for the Federal Reserve to steadily raise interest rates next year.
“The economy is not too cold, and not too hot, it is just right. The Fed can stay the course … no need to depart from a gradual pace given what we know currently about the economy,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.
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