WASHINGTON (Reuters) – New orders for key U.S.-manufactured capital goods increased more than expected in January while shipments of those so-called core goods rebounded, suggesting that business spending on equipment picked up at the start of the first quarter.

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.8% last month, the Commerce Department said on Monday. These so-called core capital goods orders dropped 0.3% in December.

Economists polled by Reuters had forecast core capital goods orders edging up 0.1%.

(Reporting by Lucia Mutikani; Editing by Dan Burns)