U.S. Capital Goods Orders, Consumer Spending Increase
At the same time, economic recovery is threatened by an increase in the number of cases of infection with coronavirus.
New orders for US-made capital goods and shipments skyrocketed in June, but this is likely not enough to stave off the worst second-quarter drop in business investment and economic activity since the Great Depression..
The rise in industrial performance, reported on Monday by the Commerce Department, is driven by increased demand following the opening of companies suspended due to the pandemic.. However, recovery is threatened by an increase in the number of new cases of coronavirus infection.
Orders for non-defense capital goods, excluding aircraft, rose 3.3 percent last month, according to the Commerce Department. This is the largest increase since July 2018. This figure rose by 1.6 percent in May..
At the same time, the number of orders for capital goods remains 3.2 percent lower than before the pandemic. There is an increased demand for equipment, metal structures and metals in primary forms. Orders for electrical equipment, appliances and components increased by 1.2 percent, which is likely due to the arrangement of home offices.
Economists polled by Reuters predicted that capital goods orders would rise 2.3 percent in June. On an annualized basis, this figure decreased by 2.3 percent.
Shipments of major capital goods rose 3.4 percent last month, the largest gain since November 2013. At the same time, the indicator is 3 percent lower than the February level.
Economists predict business spending on hardware in the second quarter will decline 36 percent year on year. Expected record drop will lead to fifth consecutive quarterly decline in total business investment.
GDP fell 34.1 percent last quarter, a record since accounting began in 1947, according to a Reuters poll of economists. The economy contracted 5.0 percent between January and March, the deepest recession since the 2007-09 recession.
Official government data on Q2 GDP to be released on Thursday.
Wall Street saw growth on Monday, driven by investor hopes for new stimulus measures. At the same time, the dollar depreciated against a basket of currencies, while prices for treasury bonds increased.
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