Orders for long-lasting U.S. factory goods fell sharply last month, dragged lower by a steep drop in volatile commercial aircraft demand. But orders that reflect business investment plans rose slightly.
Durable-goods orders decreased 5.7% from the prior month to a seasonally adjusted $216.28 billion, the Commerce Department said Wednesday.
Much of the decline in March was in the aircraft sector. But, even when you exclude transportation, new orders fell 1.4 percent. New durable goods orders were down mostly across the board, with the exception of motor vehicles and computers and electronics.
"Manufacturing ended the quarter on a very weak note," Societe Generale senior economist Brian Jones told Bloomberg. "Not only was the March number weak but we lost on the prior revision." He had predicted orders to drop by 6 percent in March.
Last month, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, edged up 0.2 percent. Orders for these so-called core capital goods had dropped 4.8 percent in February and economists had expected a 0.4 percent increase last month.
"There's clearly rising near-term caution in capital spending plans by businesses as fiscal tightening hits and global growth slows," said Ted Wieseman, an economist at Morgan Stanley in New York, according to Reuters.
