Plunge In U.S. Core Capital Goods Orders Signals Weak Business Investment

U.S. core capital goods orders fell sharply in April, a sign that business investment is losing momentum due to trade uncertainty, Reuters' Lucia Mutikani reported.

The 1.3% drop in non-defense capital goods orders excluding aircraft reported by the Commerce Department far outpaced economists’ forecast of a 0.1% dip.

The Commerce Department reported a 1.3% drop in non-defense capital goods orders excluding aircraft — a key indicator of business spending plans — following a 0.3% gain in March.

That far outpaced economists’ forecast of a 0.1% dip. Core shipments fell 0.1% after rising 0.5% the previous month.

Economists say inconsistent messaging from the Trump administration on tariffs has stifled investment decisions.

“These data offer the first confirming evidence” of declining capital investment, said Santander US economist Stephen Stanley. First-quarter business spending had surged due to front-loading ahead of expected tariffs, but the momentum appears to have reversed in Q2.