US core capital goods orders surge in August

New orders for key U.S.-manufactured capital goods increased more than expected in ​August and data for the prior month ‌was revised sharply higher, pointing to another quarter of robust growth in business spending on equipment ​amid an artificial intelligence infrastructure buildout.

Non-defense capital ​goods orders excluding aircraft, a closely watched ⁠proxy for business spending, jumped 1.6% last month ​after an upwardly revised 0.6% increase in ​July, the Commerce Department's Census Bureau said on Friday.

Economists polled by Reuters had forecast these so-called core capital goods ​orders rising 0.5% after a previously reported unchanged ​reading in July. Shipments of core capital goods, which ‌go ⁠into the calculation of the business spending on equipment component in the gross domestic product report, increased 0.6% last month after advancing 1.4% ​in July.

Business ​spending on ⁠equipment has notched two straight quarters of double-digit growth, largely fueled ​by aggressive investment in AI, helping ​to ⁠underpin manufacturing and the overall economy. But manufacturing, especially segments not tied to AI, could slow ⁠against ​the backdrop of rising ​oil prices, interest rates and long-term US Treasury yields, economists ​warned.