New orders for key manufacturing capital goods in the United States were not expected to fall in July, and data for the previous month were revised down, pointing to a loss of momentum in business spending on equipment extending into the early third quarter.
Orders for non-defense capital goods, excluding aircraft, a closely watched proxy for business spending plans, fell 0.1% last month after a revised-down 0.5% rise in June, the Commerce Department's Census Bureau said on Monday.
Economists polled by Reuters had forecast orders for these core capital goods to remain unchanged after a previously reported 0.9% increase in June.
Business spending on equipment posted double-digit growth in the second quarter, with spending on goods remaining strong despite a 525 basis point interest rate hike by the Federal Reserve in 2022 and 2023.
U.S. central bank has maintained the benchmark overnight interest rate in the 5.25%-5.50% range for a year. Fed Chairman Jerome Powell on Friday signaled that a rate cut was imminent amid concerns about labor market weakness.
Financial markets expect the Fed to begin its easing cycle next month with a rate cut of 25 basis points, although a cut of half a percentage point cannot be ruled out.
