US planned business spending expands
Source: Agencies |
July 26, 2013, Friday
|
Print Edition
Print Edition
A GAUGE of planned United States business spending rose for a third straight month in June, offering a hopeful sign for a pickup in economic growth in the second half of the year.
Other data released yesterday showed first-time applications for unemployment benefits increased slightly last week, but the underlying trend pointed to continued job gains.
The Commerce Department said yesterday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.7 percent after gaining a revised 2.2 percent in May.
Economists had expected this category to only rise 0.5 percent after a previously reported 1.5 percent gain in May.
Orders for long-lasting manufactured goods jumped 4.2 percent as demand for goods ranging from aircraft to machinery improved. Orders for these goods, which range from toasters to aircraft, had risen by a revised 5.2 percent in May.
Economists had expected orders for durable goods to rise only 1.3 percent after a previously reported 3.7 percent increase the prior month.
The gains in both the so-called core capital goods and durable goods orders were consistent with other manufacturing data that have suggested factory activity is regaining some momentum after hitting a soft patch earlier this year.
"There is decent momentum suggesting the manufacturing sector continues to hold and contribute to economic growth in the second quarter and the beginning of the third quarter," said Sam Bullard, senior economist at Wells Fargo Securities.
In a separate report, the Labor Department said initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 343,000 last week.
Claims tend to be volatile around this time of the year because auto assembly plants usually shut down for retooling. But many have either shortened the shutdown period or completely forgone the closure, throwing off the model that the government uses to adjust the data for seasonal variations.
Other data released yesterday showed first-time applications for unemployment benefits increased slightly last week, but the underlying trend pointed to continued job gains.
The Commerce Department said yesterday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 0.7 percent after gaining a revised 2.2 percent in May.
Economists had expected this category to only rise 0.5 percent after a previously reported 1.5 percent gain in May.
Orders for long-lasting manufactured goods jumped 4.2 percent as demand for goods ranging from aircraft to machinery improved. Orders for these goods, which range from toasters to aircraft, had risen by a revised 5.2 percent in May.
Economists had expected orders for durable goods to rise only 1.3 percent after a previously reported 3.7 percent increase the prior month.
The gains in both the so-called core capital goods and durable goods orders were consistent with other manufacturing data that have suggested factory activity is regaining some momentum after hitting a soft patch earlier this year.
"There is decent momentum suggesting the manufacturing sector continues to hold and contribute to economic growth in the second quarter and the beginning of the third quarter," said Sam Bullard, senior economist at Wells Fargo Securities.
In a separate report, the Labor Department said initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 343,000 last week.
Claims tend to be volatile around this time of the year because auto assembly plants usually shut down for retooling. But many have either shortened the shutdown period or completely forgone the closure, throwing off the model that the government uses to adjust the data for seasonal variations.
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