Enterprise equipment investment is rebounding! Core capital goods orders in the United States rose 1.1% in July, exceeding expectations.

US business equipment orders in July exceeded expectations, indicating that as uncertainty surrounding trade and tax policies gradually diminishes, businesses are moving forward with investment plans. Data released by the US Department of Commerce on Tuesday showed that core capital goods orders (equipment investment indicator excluding aircraft and military equipment) increased by 1.1% last month, revised from a 0.6% decrease in June. This increase surpassed all economists' forecasts in a survey conducted by Bloomberg. Orders for all durable goods (including products with a life expectancy of at least three years such as commercial aircraft and military equipment) decreased by 2.8%. Earlier this month, Boeing reported that orders in July were lower than in June. Despite the growth, economists expect business investment to remain soft for the remainder of this year until it picks up in 2026, as businesses take advantage of the tax provisions following the enactment of the "Big Beautiful Act" by President Trump. In the first half of this year, due to inconsistent tariff announcements and concerns about demand, businesses have generally been cautious about capital spending. In addition to the surge in commercial investment related to Boeing in the first quarter, businesses have also increased spending on equipment to accelerate the application of artificial intelligence. Investments in artificial intelligence and similar capital expenditures have the potential to boost productivity for companies aiming to offset higher costs, including import tariffs. The durable goods report showed an increase in orders for electrical equipment, computers, machinery, and metals last month. Orders for cars also rebounded. Shipments of non-defense capital goods, including aircraft, increased by 3.3%, directly contributing to the equipment investment portion of the GDP report. The government uses shipment data rather than potentially canceled orders as an input for GDP. The government's report showed that core capital goods shipments (a less volatile indicator excluding aircraft and military equipment) increased by 0.7% after being revised upward last month. Economists prefer to use core equipment shipment data to measure potential capital investment, as there is a long time lag between ordering aircraft and military equipment and actual shipment. Before the durable goods report was released, the Atlanta Fed's GDPNow forecast predicted a slight increase in business equipment spending in the third quarter. Equipment spending contributed 0.26 percentage points in the second quarter and 1.11 percentage points in the first quarter. The Commerce Department's report showed that monthly volatile orders for commercial aircraft decreased for the second consecutive month after a significant increase in May. Boeing reported receiving 31 orders last month, lower than 116 in June and 303 in May.