Overview
- August data showed a bigger-than-expected rise in non‑defense core capital goods orders excluding aircraft, with a 1.6% monthly gain and a 10.6% year‑over‑year increase, driven by computers and communications equipment.
- Shipments of core capital goods, which feed directly into the business‑equipment component of GDP, rose 0.6% in August after a 1.4% gain in July, supporting forecasts of solid third‑quarter growth.
- Orders for computers and related products climbed 1.5% in August and were up about 20% from a year earlier while communications equipment orders surged roughly 36% year‑over‑year, reflecting an AI infrastructure buildout.
- The Federal Reserve last week raised its benchmark rate by 25 basis points and signaled more hikes, and markets place a high probability on further tightening that could cool investment outside AI.
- Economists warn the AI investment wave may not be durable and say rising oil prices, higher interest rates and longer Treasury yields tied to the Middle East conflict could weaken non‑AI manufacturing and slow future equipment spending.