U.S. Business Spending Digging Out of Deep Hole; Outlook Uncertain | Investing News

WASHINGTON (Reuters) – New orders for key U.S.-made capital goods increased more than expected in August and shipments raced to their highest level in nearly six years, suggesting a rebound in business spending on equipment was underway after a prolonged slump.

The show of confidence by businesses in the report from the Commerce Department on Friday also bolstered expectations for a sharp turnaround in economic activity in the third quarter, thanks to government money, after it was hammered by the COVID-19 pandemic in the first half of the year.

But fiscal aid is running out and new coronavirus cases are rising in the country, clouding the fourth-quarter picture.

Federal Reserve Chair Jerome Powell this week stressed the need for more fiscal stimulus, telling lawmakers on Thursday that it could make the difference between continued recovery and a much slower economic slog. Another rescue package appears unlikely before the Nov. 3

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