US core capital goods orders beat expectations in November

• Non-defense capital goods orders excluding aircraft (core orders) increased 0.7% in November versus 0.3% economist forecast, with October revised down to 0.3% from 0.5%
• Core capital goods shipments rose 0.4% after an 0.8% gain in October, indicating steady business investment in equipment
• The data release was delayed by a 43-day federal government shutdown and follows strong consumer spending reports for October and November

Summary

U.S. core capital goods orders exceeded expectations in November, signaling sustained business equipment spending growth in Q4. Non-defense capital goods orders excluding aircraft—a key indicator of business investment—rose 0.7%, surpassing the consensus forecast of 0.3% and outpacing October's downwardly revised 0.3% gain.

Core capital goods shipments increased 0.4% in November, following a 0.8% advance in October. These figures suggest businesses maintained steady investment momentum despite economic uncertainties.

The data release was delayed by a 43-day federal government shutdown but arrives alongside recent reports showing robust consumer spending in October and November. The stronger-than-expected business and consumer activity has prompted the Atlanta Federal Reserve to forecast Q4 GDP growth at a 5.4% annualized rate—significantly above the 4.4% pace recorded in Q3.

Market Implications:

The robust capital goods orders data reinforces optimism about economic resilience and business confidence heading into year-end. Equipment investment was a key contributor to Q3's fastest economic growth in three years, alongside consumer spending and a narrower trade deficit. The November figures suggest this momentum continued through Q4.

For investors, the data points to sustained corporate capital expenditure, potentially benefiting industrial equipment manufacturers and related sectors. The strong economic activity may also influence Federal Reserve policy considerations regarding interest rates, though the report does not specifically address monetary policy implications.

The beat on core orders indicates businesses remain willing to invest in productive capacity despite various economic headwinds, supporting a positive outlook for manufacturing and industrial activity.