US core capital goods orders point to robust growth in business spending on equipment
SPY•Core capital goods orders rose 1.6% in August, after a revised 0.6% increase in July, while shipments climbed 0.6%. Durable goods orders were unchanged, restrained by a decline in aircraft orders.
1. Core orders accelerate
Non-defense capital goods orders excluding aircraft, a proxy for business spending, increased 1.6% in August after a revised 0.6% rise in July. Economists had expected a 0.5% increase. Orders were up 10.6% from a year earlier.
2. Strength across categories
Orders for electrical equipment, appliances and components rebounded 1.1%; machinery orders rose 1.1%, and primary metals bookings increased 1.2%. Computer orders rose 1.5% and were up 20.1% year on year, while communications equipment orders increased 0.3% and were up 35.8%. Shipments of core capital goods, which feed into the equipment-spending component of GDP, rose 0.6% after a 1.4% increase in July.
3. Durable goods unchanged
Overall durable goods orders were unchanged after rising 0.9% in July, as transportation equipment orders fell 0.6%. Civilian aircraft orders dropped 4.3%; Boeing reported 15 commercial aircraft orders, down from 38 in July. The article cited concerns about the sustainability of AI-driven investment and the potential effects of higher oil prices and interest rates on manufacturing outside AI.
