The United States saw a significant increase in new orders for core capital goods in August, exceeding forecasts. According to the Commerce Department's Census Bureau, orders for non-defense capital goods excluding aircraft rose 1.6% in August. This growth follows a revised 0.6% increase in July. The surge indicates a strong quarter for business spending on equipment, driven by investments in artificial intelligence infrastructure.
Economists surveyed by Reuters had predicted a 0.5% rise in core capital goods orders, which are closely watched as an indicator of business investment. The previous month's reading was initially reported as unchanged. The upward revision to July's data suggests that businesses are continuing to invest in equipment. This trend is expected to support the overall economy.
Shipments of core capital goods, which are used to calculate business equipment spending in GDP reports, increased 0.6% in August. This growth follows a 1.4% rise in July. The strong performance of core capital goods orders and shipments indicates that businesses are continuing to invest in equipment. This investment is driving growth in the manufacturing sector.
Business spending on equipment has grown at a rate of 10% or more for two consecutive quarters. This growth is largely driven by investments in artificial intelligence infrastructure. The trend is expected to continue, supporting the broader economy. However, some economists warn that the manufacturing sector may slow down due to higher oil prices, interest rates, and long-term Treasury yields.
The increase in core capital goods orders and shipments is a positive sign for the US economy. The growth in business investment is helping to drive economic expansion. The Commerce Department's report suggests that the economy is continuing to grow, despite some concerns about the manufacturing sector.
The strong performance of core capital goods orders and shipments is also reflected in the growth of the manufacturing sector. The sector has been driven by investments in AI infrastructure, which is expected to continue in the coming quarters. However, some economists are cautious about the outlook for the sector.
The US economy is expected to continue growing, driven by business investment and consumer spending. The growth in core capital goods orders and shipments is a positive sign for the economy. The trend is expected to continue, supporting the broader economy.
Key points
- US core capital goods orders jumped 1.6% in August, beating expectations.
- Business spending on equipment has grown at a rate of 10% or more for two consecutive quarters.
- Growth is driven by investments in artificial intelligence infrastructure.
