Orders placed with U.S. factories for business equipment accelerated by more than forecast in July, a sign solid demand extended into the second half despite corporate concerns over tariffs, Commerce Department figures showed Friday.
Highlights of Durable Goods (July)
Non-military capital-goods orders excluding aircraft rose 1.4% (est. 0.5% rise) after upwardly revised 0.6% increase in prior month; figure is proxy for business investment
Shipments of those goods, used to calculate gross domestic product, rose 0.9% (est. 0.3% increase) after upwardly revised 0.9% gain
Broader measure of bookings for all durable goods, or items meant to last at least three years, fell 1.7% (est. 1% decline) following 0.7% increase; reflects plunge in aircraft orders
Orders rose for machinery, computers and electronic products and motor vehicles and parts last month, according to the report. The data, representing the first results since the U.S. and China imposed tariffs on each other’s goods in early July, signal that business investment remains intact even as President Donald Trump widens a trade war to a growing range of products from China.
Growth in business spending, which is getting a boost from lower corporate taxes, is one of the factors supporting economic growth that could reach 3 percent in the second half. Even so, the uncertainty over trade may spur companies to slow investment. The next round of proposed actions by the Trump administration against Chinese imports would place tariffs of as much as 25 percent on $200 billion in goods.
Source : Bloomberg