- July 28, 2021
- Posted by: Stratford Team
- Category: Business
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Businesses are investing in themselves.
Why it matters: Core capital goods orders, or those for durable goods that aren’t aircraft or defense-related, are a proxy for business investment.
- These equipment orders will get fulfilled in the months ahead, so they reflect businesses’ expectations for the future.
- Continued growth in this measure suggests the economic growth we’re experiencing today may not be the peak.
By the numbers: Core capital goods orders increased by 0.5% in June to $76.1 billion, up from an upwardly revised $75.7 billion in May. Year-over-year, this measure is up 16.7%.
What they’re saying: Pantheon Macroeconomics’ Ian Shepherdson says the elevated levels of these orders is “remarkable.”
- “A combination of rebounding earnings and support from the federal government, coupled recently with clear evidence of acute labor shortages, is pushing companies into raising capex in order to expand capacity and remain competitive,” he…
