US Capital Investment Rebounds in June

A gauge of U.S. business investment plans rebounded solidly in June, suggesting the drag on manufacturing from capital spending cuts was starting to ebb.

The slightly upbeat report bolsters the economic growth outlook and supports views the Federal Reserve will raise interest rates later this year. The Fed’s policy-setting committee meets on Tuesday and Wednesday.

The Commerce Department said on Monday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.9 percent last month after an unrevized 0.4 percent drop in May. The increase followed two straight months of declines.

Economists had expected these so-called core capital goods to increase 0.4 percent in June.

U.S. financial markets were little moved by the report as a plunge in Chinese stocks overnight sparked concerns about the global economy. Prices for U.S. government debt rose, while U.S. stock index futures were trading lower.

Deep investment spending cuts in the energy sector in the aftermath of a more than 60 percent plunge in crude oil prices last year have weighed on factory activity. But there are signs that the energy spending rout is close to an end.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.