New orders for key U.S.-made capital goods increased more than expected in July and growth in shipments held firm, signs that business investment started the third quarter on a strong note.
The Commerce Department said on Friday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 1.4 percent last month after an upwardly revised 0.9 percent increase in June.
Business spending on equipment is being supported by the Trump administration's $1.5 trillion income tax cut package, which came into effect in January.
But there are worries that trade tensions between the United States and its major trade partners, including China, Canada, Mexico and the European Union, could offset the fiscal stimulus.
Economists polled by Reuters had forecast the so-called core capital goods orders rising 0.4 percent in July after a previously reported 0.2 percent gain in June. Core capital goods orders increased 7.2 percent on a year-on-year basis.
Shipments of core capital goods rose 0.9 percent last month after an upwardly revised 0.9 percent gain in June.