US core capital goods orders dip in July
2024.08.26 09:08
WASHINGTON (Reuters) – New orders for key U.S.-manufactured capital goods unexpectedly fell in July and data for the prior month was revised lower, suggesting a loss of momentum in business spending on equipment that extended into the early part of the third quarter.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1% last month after a downwardly revised 0.5% increase in June, the Commerce Department’s Census Bureau said on Monday.
Economists polled by Reuters had forecast these so-called core capital goods orders unchanged after a previously reported 0.9% jump in June.
Business spending on equipment notched double-digit growth in the second quarter, with spending on goods largely holding up despite 525 basis points worth of interest rate hikes from the Federal Reserve in 2022 and 2023.
The U.S. central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range for a year. Fed Chair Jerome Powell last Friday signaled rate cuts were imminent amid concerns over labor market weakness.
Financial markets expect the Fed to kick off its easing cycle next month with a 25 basis points rate reduction, though a half-percentage point cut cannot be ruled out.
