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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
In a positive sign for the US manufacturing sector, new orders for core capital goods—non-defense capital goods excluding aircraft—rebounded sharply in May amid broad-based demand, according to Commerce Department data reported by Reuters. The strong recovery follows a decline in the prior month, reinforcing expectations that business investment in equipment will continue to support economic growth in the second quarter.
The core capital goods orders surged above analyst forecasts, reflecting improved business confidence and corporate appetite for capital expansion despite elevated interest rates. The data adds to a series of recent positive readings, including resilient consumer confidence and retail sales, strengthening the narrative of a robust US economy. Per market data, the upbeat release has reduced expectations for an early Federal Reserve rate cut, with futures pricing a hold at the July meeting.
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Sign InMarkets now look to upcoming data for confirmation of the trend, with the ISM manufacturing PMI for June and the Personal Consumption Expenditures (PCE) price index due this week as key catalysts. The scheduled speech by Fed Governor Waller is also in focus for clues on the monetary policy path. With interest rates still at restrictive levels, the sustainability of this orders rebound will be a crucial test of the US economy's resilience in the second half of the year.