Sluggish Growth Rebound Suspected on Weak U.S. Business Spending

U.S. business investment spending plans fell for a seventh straight month in March, weighed down by a strong dollar and lower energy prices, suggesting the economy was struggling to rebound from a recent soft patch.  The report from the Commerce Department on Friday came on the heels of lukewarm data on retail sales, employment and housing starts that have hinted at insufficient growth momentum that could prompt the Federal Reserve to delay raising interest rates until later this year.

“This is consistent with a sluggish rebound in growth. It’s shedding more doubt on the Fed’s willingness to raise rates mid-year,” said Gennadiy Goldberg, an economist at TD Securities in New York.  Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, declined 0.5 percent last month after a revised 2.2 percent drop in February, which was the biggest decline since July 2013.

The so-called core capital goods orders were previously reported to have declined 1.1 percent in February. Economists had forecast these orders gaining 0.3 percent last month.  The weakness mirrors other manufacturing indicators such as industrial production and various regional factory surveys.

Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.