US core capital goods orders saw a moderate increase in new orders in March, with revised data from the previous month suggesting a slower pace of business spending on equipment during the first quarter, Reuter reported citing the Commerce Department’s Census Bureau data released on Wednesday.
Orders for non-defense capital goods excluding aircraft, a key indicator of business spending intentions, edged up by 0.2 per cent last month. However, the figures for February were revised downward, indicating a 0.4 per cent rise in these core capital goods orders instead of the initially reported 0.7 per cent.
Economists surveyed by Reuters had anticipated a 0.2 per cent increase in core capital goods orders.
Moreover, the backdrop of sluggish business spending on equipment stems partly from the Federal Reserve‘s cumulative 525 basis points increase in interest rates since March 2022, aimed at curbing inflation. While expectations loom for the Fed to commence rate cuts this year, the timing of the first reduction remains uncertain amid persistent inflationary pressures amid a resilient economy.
