New orders for US factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth slowed further in the first quarter.
The Commerce Department said on Monday new orders for manufactured goods declined 1.7% as demand fell broadly, reversing January's downwardly revised 1.2% increase.
Orders have declined in 14 of the last 19 months. They were previously reported to have increased 1.6% in January.
The department also said orders for non-defense capital goods excluding aircraft fell by a steeper 2.5% in February instead of the 1.8% drop reported last month.
These so-called core capital goods are seen as a measure of business confidence and spending plans. "This morning's report suggests a more sluggish manufacturing sector in the early part of the quarter," said Jesse Hurwitz, an economist at Barclays in New York.
The report added to weak consumer spending and trade data in suggesting economic growth moderated further at the turn of the year after slowing to a 1.4% annualized pace in the fourth quarter. Estimates for first-quarter gross domestic product growth are currently below a 1% rate.
US government bond prices were little changed after the data, while the dollar fell to a two-week low against the yen.
US stocks were trading marginally lower.
Manufacturing, which accounts for about 12% of the economy, has been pressured by a strong dollar and weak global demand, which have undermined exports of factory goods, as well as efforts by businesses to reduce an inventory overhang.
The sector has also been slammed by investment cuts by energy firms as they adjust to reduced profits from cheaper oil.
But the worst of the factory slump appears to be over, with a survey last week showing manufacturing activity expanded in March for the first time in six months.
After gaining about 20% versus the currencies of the United States' main trading partners between June 2014 and December 2015, the greenback is flat on a trade-weighted basis so far this year.
In addition, the slide in oil prices has slowed. "We remain hopeful for some upcoming improvement in the data as many of these headwinds have either passed or faded," said Daniel Silver, an economist at JPMorgan in New York.
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The Commerce Department said on Monday new orders for manufactured goods declined 1.7% as demand fell broadly, reversing January's downwardly revised 1.2% increase.
Orders have declined in 14 of the last 19 months. They were previously reported to have increased 1.6% in January.
The department also said orders for non-defense capital goods excluding aircraft fell by a steeper 2.5% in February instead of the 1.8% drop reported last month.
These so-called core capital goods are seen as a measure of business confidence and spending plans. "This morning's report suggests a more sluggish manufacturing sector in the early part of the quarter," said Jesse Hurwitz, an economist at Barclays in New York.
The report added to weak consumer spending and trade data in suggesting economic growth moderated further at the turn of the year after slowing to a 1.4% annualized pace in the fourth quarter. Estimates for first-quarter gross domestic product growth are currently below a 1% rate.
US government bond prices were little changed after the data, while the dollar fell to a two-week low against the yen.
US stocks were trading marginally lower.
Manufacturing, which accounts for about 12% of the economy, has been pressured by a strong dollar and weak global demand, which have undermined exports of factory goods, as well as efforts by businesses to reduce an inventory overhang.
The sector has also been slammed by investment cuts by energy firms as they adjust to reduced profits from cheaper oil.
But the worst of the factory slump appears to be over, with a survey last week showing manufacturing activity expanded in March for the first time in six months.
After gaining about 20% versus the currencies of the United States' main trading partners between June 2014 and December 2015, the greenback is flat on a trade-weighted basis so far this year.
In addition, the slide in oil prices has slowed. "We remain hopeful for some upcoming improvement in the data as many of these headwinds have either passed or faded," said Daniel Silver, an economist at JPMorgan in New York.
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