WASHINGTON (Reuters) -New orders for key U.S.-manufactured capital goods increased more than expected in July, suggesting business spending on equipment got off to a strong start in the third quarter.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, surged 1.1% last month after a revised 0.6% decline in June, the Commerce Department's Census Bureau said on Tuesday.

Economists polled by Reuters had forecast these so-called core capital goods orders rebounding 0.2% after a previously reported 0.8% drop in June. 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 increased 0.7% after rising 0.4% in the prior month. 

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 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, fell 2.8%, pulled down by fewer commercial aircraft bookings. Durable goods orders decreased 9.4% in June. 

Boeing reported on its website that it had received only 31 aircraft orders compared to 116 in June. Boeing has been the biggest winner of the White House's trade deals and economists expect aircraft orders to rise this year. 

"But significant orders for planes this year may be more a consequence of pulling forward of future orders as opposed to longer-lasting demand," said Veronica Clark, an economist at Citigroup. "This could imply a period of particularly weak aircraft orders and production at some point in the coming quarters."