Gain in U.S. Capital Goods Orders Shows Solid InvestmentBy
U.S. orders for business equipment increased more than forecast in August, indicating solid demand is continuing in the third quarter, Commerce Department figures showed Wednesday.
Highlights of Durable Goods Report (August)
The underlying trend in core capital goods shipments and orders has been improving the past few months. Orders for non-defense capital goods excluding aircraft increased an annualized 6.4 percent in the three months ended in August, while shipments were up at a 7.5 percent pace. Both measures marked an acceleration from the end of the second quarter.
The effects on supply chains from hurricanes Harvey and Irma may make it hard to interpret the next few reports. The government said in a special statement that it couldn’t isolate the effects of the storms. At the same time, rebuilding efforts could contribute to a pickup in durables orders into 2018.
The latest strengthening of the equipment numbers that feed into GDP calculations bodes well for growth, which has been driven mainly by household spending in this expansion. A better outlook for overseas markets and a weaker dollar may also spur export-related activity.
- Orders for motor vehicles and parts rose 1.5 percent
- Orders for communications equipment increased 4 percent, the most since November, while those for machinery were up 0.3 percent
- Electrical equipment and appliances orders eased 0.1 percent after a 1.7 percent jump
- Bookings for civilian aircraft and parts increased 44.8 percent after plunging 71.1 percent; defense capital-goods orders fell 9.4 percent
- Durable goods inventories rose 0.3 percent
— With assistance by Jordan Yadoo