Orders at U.S. factories for long-lasting products fell by more than expected in February, with a proxy for business investment unexpectedly plunging.
Durable goods orders declined by 2.2 percent in February. Orders for so-called “core capital goods”—a category that excludes transportation and defense orders, and is considered a proxy for business investment—fell by 0.3 percent.
Economists had forecast a decline of one percent in overall orders and a 0.4 percent rise in core capital goods orders.
The sharp decline in the headline number was driven by a drop-off in orders for passenger planes and autos.
But orders were weak overall. Every major category except computers and defense saw falling demand.
The figures are not adjusted for inflation. If they were, the decline would be even steeper.
This was the first decline in capital goods spending in a year, raising fears that the economy might be slowing more than expected.
Orders for motor vehicles and parts fell by 0.5 percent and shipments declined by 0.8 percent. Americans still want cars but shortages of crucial parts, including microchips, have left many dealers with low or no inventory.
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