A gauge of U.S. business investment plans rebounded solidly in June, suggesting the drag on manufacturing from capital spending cuts was starting to ebb.
The Commerce Department said on Monday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.9 percent last month after an unrevised 0.4 percent drop in May. The increase followed two straight months of decline.
Economists polled by Reuters had expected these so-called core capital goods to increase 0.4 percent in June.
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Deep investment spending cuts in the energy sector in the aftermath of a more than 60 percent plunge in crude oil prices last year have weighed on factory activity. But there are signs that the energy spending rout is close to an end.
Data on Friday showed U.S. energy firms added 21 oil rigs last week, marking the third increase over the past 33 weeks and bringing the total rig count to its highest since late May.
Schlumberger, the world's No. 1 oilfield services provider said last week it believed the North American rig count may be bottoming and that a slow rise in both land drilling and completion activity could occur in the second half of the year.