US core capital goods orders fall in February

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US core capital goods orders fall in February

New orders for U.S.-made capital goods unexpectedly fell in February, while shipments slowed, but demand for goods remains strong, which should keep manufacturing expanding.

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, slipped 0.3% last month, the Commerce Department said on Thursday. These so-called core capital goods orders jumped 1.3% in January.

Economists polled by Reuters had forecast core capital goods orders rising 0.5%.

Shipments of core capital goods gained 0.5% last month after increasing 2.1% in January. Core capital goods shipments are used to calculate equipment spending in the gross domestic product measurement.

Demand for goods remains strong even as spending is shifting back to services, keeping manufacturing growing. But the sector, which accounts for 11.9% of the economy, continues to battle supply bottlenecks.

Though supply chains have been improving, that progress could be set back by Russia’s war against Ukraine, which has sent commodity prices, including oil, soaring. Factories are sitting on piles of unfinished work.

Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, fell 2.2% after increasing 1.6% in January. They were pulled down by a 5.6% decline in orders for transportation equipment, which followed a 3.2% increased in January.

Motor vehicle orders fell 0.5% after decreasing 0.7% in January. Orders for the volatile civilian aircraft category tumbled 30.4% after increasing 10.9% in January. Boeing BA.N reported on its website that it had received only 37 aircraft orders last month compared to 77 in January.

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