WASHINGTON—New orders for U.S.–made capital goods increased in July, but the pace slowed from the prior month, suggesting that business spending on equipment could struggle to rebound after contracting in the second quarter.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.4 percent last month, the Commerce Department said on Wednesday. These so-called core capital goods orders surged 0.9 percent in June.
Economists polled by Reuters had forecast core capital goods orders would increase 0.3 percent.
Orders are slowing as the Federal Reserve’s aggressive monetary policy campaign to fight inflation dampens demand. But manufacturing, which accounts for 11.9 percent of the economy, remains supported by still-low inventories of long-lasting manufactured goods like motor vehicles….