WASHINGTON: New orders for key U.S.-made capital goods surged in June, but the jump will probably not change expectations that business investment contracted further in the second quarter and contributed to holding back the economy.
Data for May was revised lower to show these so-called core capital goods orders gaining 0.3per cent instead of rising 0.5per cent as previously reported. Economists polled by Reuters had forecast core capital goods orders would climb 0.2per cent in June. U.S. stock index futures were unchanged after the release of the data, while the dollar slightly trimmed losses against the yen. Prices of U.S. Treasuries were trading lower after giving up earlier gains.In a second report on Thursday, the Commerce Department said the goods trade deficit fell 1.2per cent to US$74.2 billion in June, with imports dropping US$4.6 billion to US$210.5 billion last month. Exports fell US$3.7 billion last month to US$136.3 billion.
Weak business investment has combined with an inventory overhang and design problems at Boeing to undercut manufacturing, which accounts for about 12per cent of the economy. The single-aisle plane was grounded worldwide in March after two fatal crashes in Ethiopia and Indonesia. Production of the aircraft has been reduced and deliveries suspended.
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