Orders for key U.S.-made goods increased more than expected in July and growth in shipments held firm, signs that business investment started the third quarter on a strong note.
Figures released Friday by the U.S. Commerce Department revealed orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 1.4%last month after an upwardly revised 0.9% increase in June.
Business spending on equipment is being supported by the Trump administration's $1.5-trillion income tax cut package, which came into effect in January.
But there are worries that trade tensions between the United States and its major trade partners, including China, Canada, Mexico and the European Union, could offset the fiscal stimulus.
Economists had forecast the so-called core capital goods orders rising 0.4%in July after a previously reported 0.2% gain in June. Core capital goods orders increased 7.2% on a year-on-year basis.
Shipments of core capital goods rose 0.9% last month after an upwardly revised 0.9% gain in June.
