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U.S. business spending declined in October compared with September, in part due to shaky confidence in the recovery, an IHS Global Insight economist said.
The Census Bureau said business spending declined 2.9 percent in October after rising 2.6 percent the previous month. But "some initial momentum seems to be stalling out," as confidence wanes, economist Brian Bethune told USA Today.
Spending on equipment and software rose 2.3 percent in the third quarter, but businesses are now holding off, despite having funds on hand after cutting operational costs during the recession, the newspaper said Monday.
Technical Materials in Lincoln, R.I., for example, laid off 35 percent of its workforce and has allocated $250,000 for equipment replacement in 2010. However, it is holding off on spending an additional $800,000, because, "I don't know the business will be there," company President Al Lubrano said.
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