Question

title: US core capital goods orders post the biggest gain in 8 months

question: give your thoughts and opinion on this topic in 350 words

Answer 1

The orders for United States manufactured capital goods have increased by 0.8 percent which is the most in the last six months. It has also beaten forecasts by experts.

The Core Capital Goods are Non Defense Capital Goods but excluding Aircrafts. The capital goods are tangible property and are used for the production of other goods and services during their lifetime. All the heavy machinery like excavators, forklifts, metal forming or metal working machines, building, computers , etc which are involved in production of other goods for sale are called capital goods.

Since capital goods are not bought by end consumers therefore increase in their orders directly suggests that the manufacturing is increasing and the market is expanding. It is considered as a leading indicator for future economic growth. Economists use it as indicator of future economic growth. Therefore increase in core capital goods orders are a good sign for the economy which has been losing steam since the effects of the corporate tax cuts have faded.

This recent unexpected surge in the core capital goods shipments can cause the analysts to raise their first quarter growth forecasts.