Orders for US business equipment rise most in eight months

[WASHINGTON] Orders placed with US factories for business equipment rose in April by the most in eight months, marking yet another robust month of capital investment fuelled by a broader reopening of the economy.

Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business equipment investment, increased 2.3 per cent after a 1.6 per cent gain a month earlier, Commerce Department figures showed Thursday.

Bookings for all durable goods - or items meant to last at least three years - unexpectedly decreased 1.3 per cent from the prior month, reflecting declines in orders for motor vehicles and military aircraft.

The median estimates in a Bloomberg survey of economists called for a 0.8 per cent increase in total durables orders and a 1 per cent gain in core capital goods bookings.

The economy's rebound from the pandemic, solid business investment and lean inventories have powered non-defence capital goods orders in all but one of the last 12 months.

However, shortages of materials and delivery bottlenecks have driven input prices skyward and hampered factories' ability to keep up with demand. Unfilled orders for durable goods rose for a second month.

Core capital goods shipments, a figure that will be used to calculate investment in the government's second-quarter gross domestic product report, increased 0.9 per cent in April.

Business spending on equipment advanced at a 13.4 per cent annualised rate in the first quarter, helping the economy grow at a 6.4 per cent pace, revised data from the Commerce Department showed separately on Thursday. Personal spending climbed at an 11.3 per cent rate.

BLOOMBERG