New orders for U.S. manufactured capital goods rose modestly in June, but weak demand for machinery and a range of other goods suggested business spending will remain subdued for a while.
The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.2 percent last month after a downwardly revised 0.5 percent decline in May.
These so-called core capital goods orders were previously reported to have declined 0.4 percent in May. Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent last month.
Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, tumbled 4.0 percent last month, the biggest drop since August 2014, after a downwardly revised 2.8 percent fall in May.
Durable goods orders were previously reported to have declined 2.3 percent in May.
Business spending has weakened since late 2015, in part as lower oil prices squeezed profits in the energy sector, forcing companies to slash capital spending budgets. Uncertainty over global demand and the upcoming U.S. presidential elections are also making companies cautious about spending, economists say.