According to data released by the Commerce Department’s Census Bureau and reported by Reuters on Wednesday, US core capital goods orders experienced a moderate increase in new orders in March. Revised data from the previous month indicates a slower pace of business spending on equipment during the first quarter.
Orders for non-defense capital goods excluding aircraft, a crucial gauge of business spending intentions, saw a slight uptick of 0.2 percent last month. However, revisions to February’s figures revealed a less robust growth in these core capital goods orders, with the initially reported 0.7 percent rise now revised downward to 0.4 percent. Economists surveyed by Reuters had anticipated a 0.2 percent increase in core capital goods orders.
The subdued backdrop of business spending on equipment is partly attributed to the Federal Reserve’s cumulative increase of 525 basis points in interest rates since March 2022, aimed at taming inflation. Although there are expectations for the Fed to initiate rate cuts this year, the timing of the first reduction remains uncertain amid persistent inflationary pressures in the face of a resilient economy.
