Washington - A gauge of US business investment improved in December, a sign that worries over tighter fiscal policy may not have held back capital spending plans as much as feared at the end of 2012.
The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for investment plans, edged up 0.2 percent last month.
Many economists had expected businesses to be more timid with spending late last year because of uncertainty over government spending cuts and tax increases, which had been scheduled to kick in this month. Congress struck a last-minute deal in early January to avoid or postpone most of the austerity measures.
Monday's data showed companies were still planning to expand their businesses.
“There's a lot more confidence,” said Wayne Kaufman, an analyst at John Thomas Financial in New York.
The data pushed down prices for US government debt, while giving the dollar a lift against the yen. But stock prices opened little changed.
The report showed new orders for overall durable goods - long lasting factory goods from toasters to automobiles - jumped 4.6 percent in December, beating economists expectations of a 1.8 percent gain.
Gains were broad based, with new orders for machinery, cars and primary metals all increasing. Orders of civilian aircraft, a volatile category, jumped 10.1 percent.
Economists still think economic growth cooled in the fourth quarter as companies slowed the pace at which they re-stocked their shelves.
But Monday's report suggested businesses expect demand in the US economy to improve.
In a further sign firms were betting their business will grow, the investment plans proxy for November was revised higher to show a 3 percent gain.
“It certainly seems to us that companies are slowly but surely expanding,” said Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York. - Reuters