A report released by the Commerce Department on Monday showed new orders for U.S. manufactured durable goods increased by much less than expected in the month of March.
The Commerce Department said durable goods orders rose by 0.5 percent in March after falling by a revised 0.9 percent in February.
Economists had expected durable goods orders to spike by 2.5 percent compared to the 1.2 percent slump that had been reported for the previous month.
The much weaker than expected durable goods orders growth was partly due to a continued decrease in orders for transportation equipment.
Largely reflecting a sharp pullback in orders for non-defense aircraft and parts, orders for transportation equipment tumbled by 1.7 percent in March after plunging by 2.0 percent in February.
Excluding the drop in orders for transportation equipment, durable goods orders jumped by 1.6 percent in March after dipping by 0.3 percent in February. The increase matched economist estimates.
The rebound in ex-transportation orders reflected notable increases in orders for fabricated metal products, primary metals and machinery.
The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, increased by 0.9 percent in March after falling by 0.8 percent in February.
Shipments in the same category, which is the source data for equipment investment in GDP, jumped by 1.3 percent in March after slumping by 1.1 percent in the previous month.
“Taken together, the data confirm that business investment momentum re-accelerated at the end of Q1 and is likely to provide positive support to GDP growth,” said Lydia Boussour, Lead U.S. Economist at Oxford Economics. “We forecast GDP growth of 9.0% annualized in Q1.”