US Economy Shows Signs of Improvement

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According to a report released yesterday, demand for the US made goods has risen in the past one month. This is in comparison with what was experienced a month ago. Shipments have surged in the past few weeks which is a sign of improved business spending at the beginning of the third quarter. According to the commerce department, the US economy has shown signs of improvement following a slow start at the beginning of the year. This is good news for the federal reserves which will have the chance to tighten monetary policy. At the same time, it has been revealed that orders for nondefense commodities without including aircraft have increased by 0.4 percent in the last one month. At the same time, the commerce department had predicted the core capital good demand to increase by 0.3 percent. In a time like this last year, the demand for these goods stood at 3.3 percent. The commerce department also revealed that shipments of goods that are referred to as core capital commodities stood at 1.0 percent. During the last two months, demands for these goods stood at 0.6 percent. For starters, core capital goods and their shipments are very crucial in calculating the government spending as well as the gross domestic product of the government. In a similar report last month, the commerce department reported that these goods had risen by 0.1 percent.

It was also revealed that US Treasuries were trading lower than expected. This also saw the US dollar been weak against a host of currencies such as the pound and the Euro. Despite the uncertainty brought about by tax reforms that will be tabled in Congress next month, business spending is on the rise. The tax reforms have only suggested that the government is looking to lower individual taxes as well as corporate taxes. At the moment, details about the tax reforms are sketchy, and all that businesses can do is wait. However, it’s still unclear about when these reforms will be implemented as the congress will be occupied with two agendas. When the Congress resumes, they will try to raise government spending and also ensure that the government remains funded. Another agenda when the Congress resumes is to ensure that the US government does not default on the sovereign debt. Spending on business equipment has also experienced some significant growth of 0.44 percent. However, the commerce department attributed this to the rebound of the oil market.

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