In August, new orders for non-military United States capital goods excluding aircraft increased for a third consecutive month, a positive indication for the business investment forecast. The Commerce Department reported on Wednesday new orders for the category, which entails goods like motor vehicles and machinery and is a closely monitored proxy for business spending plans, advanced 0.6 percent last month. A poll from economists had projected these so-called core capital goods orders dropping 0.2 percent.
The government downwardly revised its outlook for those orders in July to a 0.8 percent increase from the previously reported 1.5 percent gain. Business spending has pulled back since the fourth quarter of 2015, in part as companies cut capital spending budgets in result to lower oil prices. The drop in investment has worried Federal Reserve policymakers because it could affect longer-term economic growth.
Shipments of core capital goods, which are used to calculate equipment spending in the government’s gross domestic product measurement, decreased 0.4 percent in August after being unchanged in July. A 21.9 percent decline in demand for civilian aircraft helped keep overall orders for durable goods even in August. Durable goods include products ranging from toasters to aircraft that are meant to last three years or more.