US core capital goods increased modestly in July

By Safiyah Riddle

(Reuters) – New orders for key U.S.-manufactured capital goods rose modestly in July, suggesting business spending on equipment could continue to grow after rebounding in the second quarter.

Orders for non-defense capital goods excluding aircraft, a gauge of business spending plans, rose 0.1% last month after falling by a revised 0.4% the month prior, Commerce Department said on Thursday.

Economists polled by Reuters had forecast core capital goods orders would be up 0.1%.

The economy grew at a 2.4% annualized rate in the second quarter, the government said in its advance estimate of GDP, exceeding widespread expectations that growth would slow amidst record-high interest rates.

The combination of a slowdown in inflation and a relatively resilient job market has led many economists to revise higher their expectations for GDP through the end of this year and into 2024. But economic activity was dragged down by cooling consumer demand and approached a stagnation point in August, according to S&P Global’s flash U.S. Composite PMI index, which was released on Wednesday.

(Reporting by Safiyah Riddle; Editing by Paul Simao and Chizu Nomiyama)