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.
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