U.S. core capital goods orders surged in June, marking a third straight monthly gain after weakness earlier in the year.

The Commerce Department reported that orders for non-defense capital goods excluding aircraft — a key measure of business investment — increased 1.9% last month after rising 0.3% in May, with demand for machinery increasing by the most in nearly 1-1/2 years.

Economists polled by Reuters had forecast core capital goods orders gaining 0.2% last month.

Core capital goods orders increased 1.9% on a year-on-year basis.

“The stronger-than-expected orders are a positive sign that business investment and manufacturing sector activity have not weakened substantially further following softness earlier in the year,” said Veronica Clark, an economist at Citi in New York.

Overall orders for long-lasting goods increased 2.0% in June, the most since August 2018, after declining 2.3% in the prior month. Civilian aircraft orders rise by $2.7 billion, accounting for more than half of the gain.

As Reuters reports, business investment has been flagged by the U.S. Federal Reserve as an area of weakness in the economy. Fed Chairman Jerome Powell earlier this month described it as appearing to have “slowed notably,” saying this might “reflect concerns about trade tensions and slower growth in the global economy.”

Economists cautioned that the improvement in investment could be short-lived given an inventory glut in the motor vehicles industry and design problems at Boeing that are helping to undercut the manufacturing sector.

“The trend in durable goods orders remains decidedly weak, with the three-month annualized growth rate off 13.0%,” economists at Wells Fargo said. “Worries about a global growth slowdown and trade tensions have not abated.”

According to a Reuters survey of economists, GDP likely increased at a 1.8% annualized rate in the April-June quarter, moderating from the first quarter’s brisk 3.1% pace. The Fed is expected to cut interest rates next Wednesday for the first time in a decade.

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