Capital goods drop

WASHINGTON – New orders for key US-made capital goods unexpectedly fell in October after three straight months of hefty gains, but a sustained increase in shipments pointed to robust business investment and economic momentum as the year winds down.

The economy’s prospects were bolstered by other data on Wednesday showing a decline in the number of Americans filing claims for unemployment benefits.

Strong business investment and tightening labour market conditions will likely keep the Federal Reserve on track to raise interest rates next month.

“Fed policymakers will likely be impressed with the positive overall trend of business investment in equipment this year,” said Chris Rupkey, chief economist at MUFG in New York.

“Interest rates do not need to be left at such low levels if the goal is to further business investment.”

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