Orders for long-lasting U.S. manufactured goods unexpectedly rose in August and there were signs that business spending on equipment regained some momentum after faltering early in the third quarter.
The Commerce Department said on Wednesday that orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, gained 0.2% last month. Data for July was revised lower to show orders for these goods decreasing 5.6% instead of 5.2% as previously reported.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, surged 0.9% after a downwardly revised 0.4% decline in the prior month. These so-called core capital goods orders were previously reported to have edged up 0.1% in July. Some of the rise in the value of orders likely reflected higher prices.
Economists polled by Reuters had forecast durable goods orders falling 0.5% last month and core capital goods orders being unchanged. Manufacturing, which makes up 11.1% of the economy, is muddling along as higher borrowing costs slow demand for goods.
Since March 2022, the U.S. central bank has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range. A strike by the United Auto Workers union against General Motors Co (GM.N), Stellantis (STLAM.MI) and Ford Motor (F.N) could pressure manufacturing.
