Commerce says businesses plan to spend

May 26, 2015 09:48 AM

Although order books at manufacturers remain lean, the core capital goods data corroborates other surveys, including one on small businesses, that showed a jump in capital expenditure plans in April and May.

Economic growth slumped early in the year and data so far on retail sales and manufacturing point to tepid economic activity early in the second quarter.

Economists polled by Reuters had forecast core capital goods orders gaining 0.4 percent.

Shipments of core capital goods, which are used to calculate equipment spending in the government's gross domestic product measurement, rose 0.8 percent last month after an upwardly revised 1.0 percent increase in March.

Shipments in March were previously reported to have increased 0.9 percent. Last month's increase in core capital goods shipments could see economists bumping up their second-quarter GDP growth estimates.

A 2.5 percent drop in transportation equipment, however, weighed down on overall orders for durable goods - items ranging from toasters to aircraft that are meant to last three years or more - which fell 0.5 percent last month.

Orders for machinery recorded their biggest gain in eight months in April and the increase in bookings for primary metals was the largest since September. While orders for computers and electronic products fell 3.6 percent, that followed a hefty 7.7 percent surge in March.

Orders for electrical equipment, appliances and components dropped 1.5 percent after gaining 0.9 percent the prior month.

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