Durable-goods orders in the United States rose 2.2 percent in February, ending two consecutive months of declines. However, a surprise fall in the index of planned spending on capital items points to a slower growth in the first quarter.
Durable goods include items that are supposed to last at least three years, such as aircraft and toasters. Orders for non-defense capital items excluding aircraft plunged 1.3 percent, down from a 0.8 percent increase in February. This index tracks planned spending by businesses on capital items.
“First-quarter business investment looks to be soft, and it challenges some of the optimism surrounding the idea that capital expenditures were set to advance noticeably in 2014 from their 2013 pace,” Omair Sharif, a Stamford, Connecticut-based senior economist at RBS told Reuters.
Economists forecast the U.S. economy to grow at a slower pace in the first quarter due to the harsh winter weather, down from 2.4 percent in the fourth quarter of last year. However, they have retained their GDP forecasts due to the 0.8 percent increase in durable goods purchases last month.
Another report indicates that the U.S. services sector grew at a steady pace this month, joining the list of other released data on industrial production, employment and retail sales in pointing that the economy is gradually recovering.
Financial research company Markit announced that its preliminary Purchasing Managers Index grew to 55.5 on March, up from 53.3 last month. A figure above 50 shows growth.
The varied reports saw the dollar advance against a basket of peers, while U.S. stocks and bonds rose higher. The European stocks also surged on Wednesday due to the strong U.S. economic data.
Deliveries of core capital items grew 0.5 percent in February, up from a decline of 1.4 percent the previous month. This measure helps the government to estimate equipment spending when calculating its gross domestic product.
“The improvement in core capital goods shipments suggests that this sector of the economy could provide a modest boost to economic activity this quarter,” said Millan Mulraine, a New York-based senior economist at TD Securities.
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