US Capital Goods Rose in July Despite Big Drop in Shipments

New orders for key U.S.-made capital goods unexpectedly rose in July, but shipments fell by the most in nearly three years, suggesting business investment remained soft and could weaken further amid an escalation in U.S.-China trade tensions.

The Commerce Department said on Monday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.4% last month, driven by strong demand for electrical equipment, appliances and components.



Data for June was revised down to show these so-called core capital goods orders advancing 0.9% instead of surging 1.5% as previously reported. Economists polled by Reuters had forecast core capital goods orders would fall 0.1% in July.

Core capital goods orders increased 1.5% on a year-on-year basis. Shipments of core capital goods fell 0.7% last month, the biggest drop since October 2016. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

Data for June was revised down to show core capital goods shipments were unchanged instead of up 0.3% as previously reported.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza