The unexpected decline in new orders for important capital goods manufactured in the United States in July and the revision of lower data for the previous month suggested a loss of momentum in business spending on equipment. This decline continued into the early part of the third quarter.
In addition, the Commerce Department’s report from Monday showed that the manufacturing sector remained stagnant despite rising interest rates. Aircraft made up the majority of the sharp increase in orders for durable manufactured goods last month.
Even so, the increase in corporate equipment spending is probably enough to keep the economy growing.
Chief economist at FWDBONDS Christopher Rupkey stated, “The economy hasn’t hit the skids yet.” “Although business investment in long-term core capital goods orders has somewhat slowed at the beginning of the third quarter, new orders are far from signalling the beginning of a recession in the overall economy.”The Census Bureau of the Commerce Department reported that non-defence capital goods orders, which do not include aircraft and are a closely watched indicator of business spending plans, decreased by 0.1% in June following a downwardly revised 0.5% increase.
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