US Core Capital Goods Orders Rise 0.5% in September, Missing Forecasts as AI Infrastructure Costs Draw Scrutiny

New orders for key US-manufactured capital goods rose 0.5% in September, while shipments surged 1.2%, suggesting business spending on equipment held a robust pace in the third quarter, the Commerce Department's Census Bureau said Tuesday. The gain in non-defense capital goods orders excluding aircraft — a proxy for business investment — followed an unrevised 1.6% jump in August and fell short of the 0.7% rise economists polled by Reuters had forecast. Core capital goods shipments, which feed into the GDP report's equipment spending component, climbed 1.2% after a 0.6% gain in September. Equipment spending has posted two straight quarters of double-digit growth, largely fueled by aggressive AI investment. Economists expect Thursday's advance GDP estimate to show growth above a 3.0% annualized rate in the third quarter. Investors are increasingly focused on rising costs of long-term projects with uncertain payoffs, as tech firms have borrowed heavily over the past year for AI spending.