Overview

• Federal Reserve data show industrial production of business equipment rose 7.9% quarter-on-quarter in Q2, an annualized rate of 16.5% and the strongest two-quarter increase since 1997 outside the pandemic rebound.
• Treasury Department counselor Joe Lavorgna credits the uptick to businesses’ confidence in the One Big Beautiful Bill’s favorable tax treatment for capital spending.
• Administration economists view the surge as an early indicator of capital deepening that could drive higher productivity and blue-collar wage gains.
• Later this week, Treasury officials will feature the equipment production figures in public briefings to underscore the administration’s economic achievements.
• Officials project that AI-driven productivity improvements will reinforce the investment boom and sustain broader growth momentum.