US core capital goods orders rise solidly in March in boost to business spending

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US core capital goods orders rise solidly in March in boost to business spending

In the latest flashpoint of an economic boom in the United States, the US Commerce Department said earlier on Monday that new orders for US-borne core capital goods rose robustly on March, reinvigorating anticipations that the US economy had accelerated by the steepest pace on record during first quarter of 2021 in nearly four decades as massive government stimulus alongside an acceleration in pandemic vaccination campaign had led to an Apollonian upsurge in demands.

Aside from that, other economic data released earlier in the day had revealed that US shipments had also surged last month, laying off the groundworks of an earlier-than-expected economic recovery from the pandemic’s fiscal fallouts.

On top of that, latest Commerce Department report comes over the heels of a flurry of upbeat economic data released last week including a scintillating advancement in labour market as weekly jobless claims fell to the lowest level since mid-March 2020 alongside a 9.8 per cent rebound in retail sales last month.

US core capital goods’ orders rise last month

Concomitantly, according to US Commerce Department data released earlier in the day, orders for non-defence US-made capital goods excluding aircrafts, a closely observed proxy for future business investments, rose 0.9 per cent on March that followed a weather-related plunge of 0.8 per cent in February.

Compared to the same time a year earlier, new orders for US-borne core capital goods soared 10.4 per cent in March, while shipments of core capital goods had bounced back 1.3 per cent last month on a year-on-year basis.

Meanwhile, addressing to a jubilant business investment landscape ahead considering an ultra-low corporate borrowing cost coupled with an acceleration in demands following a whopping $1.9 trillion in fiscal stimulus from a Biden Administration which had been extremely generous while spending despite a soaring debt-load, a senior US economist at Capital Economics, Andrew Hunter, said, “With demand being boosted by fiscal stimulus, corporate borrowing costs still low and the manufacturing new orders surveys going from strength to strength, we expect investment to continue expanding at a robust pace this year”.