US core capital goods orders rise 0.9% in June

Key facts

• New orders for U.S.-manufactured non-defense capital goods excluding aircraft rose 0.9% in June.
• This follows an upwardly revised 1.9% increase in May.
• Shipments of core capital goods surged 1.9% in June.
• Economists had predicted a 0.8% rise in core capital goods orders.
• The data suggests a solid pace of economic growth for the second quarter.
• Business investment in artificial intelligence is fueling demand for related equipment.

New orders for key U.S.-manufactured capital goods increased strongly in June, with a 0.9% rise in non-defense capital goods orders excluding aircraft. This closely watched proxy for business spending surpassed economists' expectations of a 0.8% advance and followed an upwardly revised 1.9% increase in May. Shipments of these core capital goods also saw a significant surge, climbing 1.9% in June after a 0.2% gain in May. This data points to a fairly solid pace of economic growth in the second quarter, with economists estimating a 2.1% annualized rate. The increase in business investment is partly attributed to companies ramping up spending on artificial intelligence, which is fueling demand for information processing equipment and related products.