Orders for U.S. capital goods climbed in August by the most in three months a sign business investment continues to support the recovery. Bookings for goods like computers and communications gear, excluding military hardware and aircraft, climbed 1.1 percent, the most since May, a Commerce Department report showed today in Washington. Demand for total durable goods dropped 0.1 percent, less than forecast. Manufacturers like General Electric Co. (GE) continue to benefit from sales to China, India and other emerging markets even as they face a slowdown in domestic spending. Gains in business investment in the U.S. indicates companies are looking beyond the plunge in stocks and concern over the European debt crisis and are looking to expand. “Capital spending has held in pretty well so far,” Mike Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said before the report. “There is certainly some worry that if capital spending pulls back, then you lose an important source of growth.” The median projection of 77 economists surveyed by Bloomberg News called for a 0.2 percent decline in total orders. Estimates ranged from a 3.4 percent drop to a 2.7 percent increase. The August gain in orders for non-defense capital goods excluding aircraft, a proxy for future business investment, followed a 0.2 percent drop in July that was smaller than previously estimated. Shipments of those items, used in calculating gross domestic product, increased 2.8 percent, the most since March, after rising a revised 0.4 percent gain the prior month. The Commerce Department had originally reported a drop for July. To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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