New orders for key U.S.-made capital goods unexpectedly fell last month and shipments recovered only moderately, pointing to continued weakness in business investment after it declined at its steepest pace in three and a half years in the second quarter.
Figures released Friday by the U.S. Commerce Department showed orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.2% last month amid weak demand for electrical equipment, appliances and components, and computers and electronic products.
What's more, data for July was revised down to show these so-called core capital goods orders unchanged instead of gaining 0.2% as previously reported. Economists had forecast core capital goods orders unchanged in August.
Core capital goods orders increased 1.1% on a year-on-year basis. Shipments of core capital goods rose 0.4% last month. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
Core capital goods shipments fell by an unrevised 0.6% in July. The Trump administration’s nearly 15-month trade war with China has been blamed for the downturn in business investment.
