Demand for durable goods grew to a recent record in August.
Driving the news: New orders reached $263.5 billion, the Commerce Department said on Monday, a 1.8% increase over July. Expectations were for 0.6% growth. Demand for transportation equipment drove the growth. Meanwhile, defense aircraft and parts, as well as cars and car parts, were a drag on demand.
Why it matters: “Continued strong goods demand, widespread shortages including of labour, and low borrowing costs, suggest that the outlook for business equipment investment remains bright,” Michael Pearce, senior U.S. economist at Capital Economics, wrote in a research note Monday.
What to watch: Shipments may not be able to keep up with new orders as shortages worsen, Pearce cautioned.