FILE PHOTO: Workers operate machinery at D'Addario's instrument strings production facility in Farmingdale, New York, U.S., July 10, 2025. REUTERS/Kylie Cooper/File Photo

WASHINGTON (Reuters) -New orders for key U.S.-manufactured capital goods unexpectedly increased in August, but a decline in shipments of these goods suggested a moderate pace of growth in business spending on equipment this quarter.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rose 0.6% last month after a downwardly revised 0.8% jump in July, the Commerce Department's Census Bureau said on Thursday.

Economists polled by Reuters had forecast these so-called core capital goods orders dipping 0.1% after a previously reported 1.0% surge in July. Some of the rise in orders likely reflects higher prices rather than increased volumes as tariffs on imported goods raise costs for manufacturers.

Shipments of core capital goods slipped 0.3% after rising 0.6% in July. Core capital goods orders have fluctuated within a wide band this year, surging as businesses rushed to bring in goods before President Donald Trump's sweeping import duties kicked in, and declining as the front-loading abated.

Business spending on equipment slowed, albeit to a still-strong pace, in the second quarter following double-digit growth in the January-March quarter.

Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, rebounded 2.9% in August after falling 2.7% in July. The increase was despite Boeing reporting on its website that it had received 26 aircraft orders compared to 31 in July.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)