WASHINGTON (dpa-AFX) - A report released by the Commerce Department on Friday showed new orders for U.S. manufactured durable goods unexpectedly came in nearly flat in the month of August.
The Commerce Department said durable goods orders were virtually unchanged in August following a downwardly revised 0.9 percent increase in July.
Economists had expected durable goods orders to decrease by 0.4 percent compared to the 1.1 percent jump that had been reported for the previous month.
Durable goods orders came in nearly flat for the month as a pullback in orders for transportation equipment offset strength in other areas.
The Commerce Department said orders for transportation equipment fell by 0.6 percent in August after surging by 1.2 percent in July.
Excluding the decrease in orders for transportation equipment, durable goods orders rose by 0.3 percent in August after climbing by 0.7 percent in July. Ex-transportation orders were expected to grow by 0.5 percent.
The report showed significant growth in orders for primary metals, machinery and electrical equipment, appliances and components, while orders for fabricated metal products fell sharply.
The Commerce Department also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, shot up by 1.6 percent in August after climbing by 0.6 percent in July.
Shipments in the same category, which is the source data for equipment investment in GDP, increased by 0.6 percent in August after jumping by 1.4 percent in July.
'Core orders are tracking very positively and core shipments point to double-digit annualized growth in business equipment spending in Q3 even after we account for the inflation impacts,' said Nationwide Financial Market Economist Oren Klachkin.
'We're maintaining an upbeat outlook for business investment despite today's strengthening headwinds,' he added. 'To be sure, rising borrowing costs may lead to some second-thoughts and cancellations in planned business investment. But AI investment is rate-insensitive and unlikely to slow down soon.'
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