(Bloomberg) -- Orders placed with U.S. factories for business equipment eased unexpectedly last month after a smaller February advance, indicating a more moderate pace of capital spending, a Commerce Department report showed Thursday.
Highlights of Durable Goods (March)
The decline in shipments of non-defense capital goods excluding aircraft was the largest since May 2016 and indicates business spending ended the first quarter on a weak note. Some economists may trim their tracking estimates for growth during the period. The Commerce Department will issue its advance estimate of first-quarter GDP on Friday.
While the setback may simply represent a pause in investment, businesses may be somewhat hesitant to spend as they assess U.S. trade policy following the implementation of tariffs on steel and aluminum.
At the same time, favorable tax policies, stable global growth and rising capacity constraints remain supportive to increased investment.
The Commerce Department’s report showed orders cooled for machinery, computers and electrical equipment.
- Orders for machinery fell 1.7 percent, the most since April 2016
- Bookings for computers and related products dropped 2.6 percent
- Commercial aircraft orders jumped 44.5 percent after a 39.1 percent increase
- Excluding transportation equipment, a volatile category, durable goods orders were essentially unchanged after a 0.9 percent increase
- Orders for motor vehicles and parts edged up 0.1 percent
- Durable-goods inventories rose 0.1 percent
- Defense capital-goods orders increased 0.9 percent
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