US Durable Goods Orders Rice Sharply, Business Investment Stays Strong

US durable goods orders rose in September at the fastest pace in five months, supported by stronger demand for aircraft and business equipment. The data added to signs that the US manufacturing sector continues to maintain solid momentum.

The value of durable goods orders increased 1.8% in September, following an upwardly revised 0.1% gain in the previous month. The result came slightly below market expectations for a 1.9% increase.

Core capital goods orders, which are closely watched as a gauge of business investment because they exclude aircraft and military equipment, rose 0.5%. Commercial aircraft orders jumped 28.4%, while bookings for computers, machinery, and motor vehicles also increased.

Business investment has remained strong this year, driven in part by spending related to artificial intelligence. Shipments of non-defense capital goods including aircraft rose 1.7%, while core capital goods shipments increased 1.2%, pointing to continued strength in real investment activity ahead of the preliminary third-quarter GDP report.

The data reinforces expectations that capital spending could make a positive contribution to US economic growth. It may also encourage the Federal Reserve to remain cautious about easing monetary policy, particularly if strong business investment continues alongside elevated inflation pressures.(mrv)

Source : Newsmaker.id