US Business Spending Surge Indicates Economic Resilience

U.S. business spending on capital goods rose significantly in December, driven by growth in the artificial intelligence sector. Despite tariffs hindering non-AI manufacturing, the sector is anticipated to recover. Economists project a 3.0% economic growth in the fourth quarter after earlier gains in the year.

New data indicates a surge in U.S. business spending on capital goods, exceeding economists' expectations in December. This increase highlights economic resilience in the face of global challenges.

Non-defense capital goods orders, excluding aircraft, saw a 0.6% rise, following a revised 0.8% increase the month prior, according to the Commerce Department's Census Bureau. Economists anticipated a 0.4% gain, underscoring the significance of these findings.

The growth is largely attributed to investments in artificial intelligence, which have bolstered the data center sector. While tariffs continue to challenge non-AI manufacturing, a broader recovery is expected as uncertainties wane. Business equipment spending is on track for its fourth consecutive quarterly growth, with economist projections indicating a 3.0% GDP increase in the fourth quarter.

(With inputs from agencies.)