US core capital goods orders rise for third straight month

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New orders for non-military U.S. capital goods other than aircraft rose for a third straight month in August, a positive signal for the business investment outlook.

The Commerce Department said on Wednesday new orders for the category, which includes goods like motor vehicles and machinery and is a closely watched proxy for business spending plans, increased 0.6 percent last month.

Economists polled by Reuters had forecast these so-called core capital goods orders falling 0.2 percent.

The government downwardly revised its estimate for those orders in July to a 0.8 percent gain from the previously reported 1.5 percent increase.

Business spending has contracted since the fourth quarter of 2015, in part as companies slashed capital spending budgets in response to lower oil prices.

The slump in investment has worried Federal Reserve policymakers because it could depress longer-term economic growth.

Shipments of core capital goods, which are used to calculate equipment spending in the government's gross domestic product measurement, fell 0.4 percent last month after being unchanged in July.

A 21.9 percent drop in demand for civilian aircraft helped keep overall orders for durable goods flat in August. Durable goods include items ranging from toasters to aircraft that are meant to last three years or more.