Business expectations for capital spending over the next twelve months rose in September, according to a survey of thousands of firms across 50 states.
The Atlanta Fed’s Business Expectations survey showed expectations for growth in capital spending rising for the third consecutive month. The gauge is at the highest level recorded in the five-year life of the survey.
The composite index for business expectations declined, largely due to a sharp decline in expectations for growth in employment. This is likely a reflection of the tightness of the labor market that has led many businesses to say they are having trouble finding workers to fill open positions. In August, the unemployment rate was 3.7 percent for the third month in a row, and the number of unemployed persons was essentially unchanged at 6.0 million.
Expectations for sales growth also dipped slightly.
The ongoing improvement in expectations for capital spending could indicate improving economic conditions. In its most recent statement, the Federal Reserve pointed to lower levels of business investment in recent months as a source of sluggishness in the U.S. economy.
The Survey’s Business Uncertainty index also declined in September to its lowest level since March. The uncertainty index climbed in the second and third quarter this year as global growth slowed and on-and-off again talks with China clouded the path of trade policies.
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