New orders for U.S. factory goods fell in February and business spending on capital goods was much weaker than initially thought, the latest indications that economic growth remained sluggish in the first quarter.
The Commerce Department said on Monday new orders for manufactured goods declined 1.7 percent as demand fell broadly, reversing January’s downwardly revised 1.2 percent increase.
Orders have declined in 14 of the last 19 months.
February’s drop in factory orders was in line with economists’ expectations. Orders were previously reported to have increased 1.6 percent in January.
The report added to weak consumer spending and trade data in suggesting economic growth failed to pick up at the turn of the year after slowing to a 1.4 percent annualized pace in the fourth quarter.
Manufacturing, which accounts for about 12 percent of the economy, has been pressured by a strong dollar and weak global demand, which have undermined exports of factory goods, and 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 cheap 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.
This article 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 Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.