US core capital goods orders increase strongly in June

[WASHINGTON] New orders for key US-manufactured capital goods increased strongly in June while shipments surged, pointing to a fairly solid pace of economic growth in the second quarter.

Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 0.9 per cent last month after an upwardly revised 1.9 per cent increase in May, the Commerce Department’s Census Bureau said on Monday (Jul 27).

Economists polled by Reuters had forecast these so-called core capital goods orders advancing 0.8 per cent after a previously reported 1.4 per cent jump in May. Shipments of core capital goods, which go into the calculation of the business spending on equipment component in the gross domestic product report, surged 1.9 per cent last month after gaining 0.2 per cent in May.

The government is scheduled to publish its advance estimate of second-quarter GDP growth on Thursday. A Reuters survey of economists estimated the economy grew at a 2.1 per cent annualised rate last quarter, which would match the January-March quarter’s pace.

Businesses are ramping up investment in artificial intelligence, fuelling demand for information processing equipment and other related products, and supporting manufacturing and the overall economy. REUTERS