Orders for capital equipment rose in April for a second straight month, a sign U.S. business investment could pick up in the second half of the year.
Bookings for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, advanced 1 percent after a 1.5 percent gain in March that was larger than previously estimated, data from the Commerce Department showed Tuesday in Washington. Total durable goods demand declined 0.5 percent, as forecast.
Oil and mining companies are counting on a reprieve as crude prices rebound from the rout that pummeled business activity, while the strong dollar continues to undermine exports of American-made goods to overseas markets. Domestic demand should keep factories churning out goods such as cars, as the labor market proves hardy.
“Without question, this is an extremely strong report, if you think about how the year started,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “You’re looking at a pretty nice profile for growth.”
Stock-index futures and Treasury securities fell after data added to evidence the economy is emerging from a first-quarter slowdown. The contract on the Standard & Poor’s 500 maturing in June declined 0.3 percent to 2,117.6 at 8:46 a.m. in New York. The yield on the benchmark 10-year note was 2.20 percent, little changed from Friday, after having been as low as 2.17 percent before the report.
Bloomberg
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