Strong Business Spending Driving the US Economy
New orders for US-made goods rose in August and orders for core capital goods were stronger than previously reported, suggesting strong business spending to offset some of the economic drag of Hurricanes Harvey and Irma.
Factory goods orders in August increased 1.2% as demand for a range of goods rose, the Commerce Department said Thursday.
Economists had forecast factory orders increasing 1.0% in August missed.
The US Commerce Department said it was unable to isolate the impact of Harvey and Irma on the data as the survey is “designed to estimate the month-to-month change in manufacturing activity at the national level and not at specific geographic areas.”
Orders for non-defense capital goods excluding aircraft – seen as a measure of business spending plans – jumped 1.1% in August instead of the 0.9% increase reported last month.
Strong business spending on equipment is helping to underpin manufacturing, which makes up about 12 percent of the US economy. Business investment in equipment grew at its fastest pace in 2 years in Q-2.
In August, orders for machinery gained 0.3% after rising 0.2% in July. Mining, Oil field and Gas field machinery orders dropped 5.1% after leaping 3.7% in July.
Orders for transportation equipment advanced 5.1%, reflecting a 44.8% rise in civilian aircraft orders.
Motor vehicle orders rose 0.7% after declining 2.2% in July. Further gains are likely in September as residents in the areas ravaged by Harvey and Irma replace flood-damaged vehicles.
Tuesday, the major automakers posted higher US new motor vehicle sales for September.
Motor vehicle sales increased to a seasonally adjusted annualized rate of 18.57-M units in September from 17.72-M units a year earlier, according to the data.