Investment spending rises for American businesses

American businesses stepped up investment spending in August despite the upheaval caused by bitter political fighting in Washington, and some economists raised their forecast for economic growth for this quarter.

By Mary Beth Nevulis, HousingZone Contributing Editor | October 3, 2011
business, spending, economy

American businesses stepped up investment spending in August despite the upheaval caused by bitter political fighting in Washington, and some economists raised their forecast for economic growth for this quarter, according to the New York Times.


The Commerce Department said Wednesday that orders for capital goods outside the military sector and excluding aircraft, a closely watched proxy for business spending, increased 1.1 percent after falling 0.2 percent in July.


That was well above economists’ expectations for a 0.3 percent rise and suggested that businesses, sitting on about $2 trillion in cash, had not responded to the recent financial market volatility by curtailing investment.


The solid rise in investment spending, which was accompanied by a 2.8 percent rise in shipments of capital goods, prompted some economists to raise forecasts for third-quarter economic growth.


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