Economic Report: U.S. business investment falls for the first time in a year. A slowing economy?
The numbers: Orders at U.S. factories for long-lasting goods fell 2.2% in February to break a string of increases and business investment fell for the first time in a year, suggesting manufacturers are still struggling mightily with supply shortages.
Orders for U.S durable goods — products meant to last at least three years — shrank for the first time in five months, the government said Thursday. Economists polled by the Wall Street Journal had forecast 1% decline.
The dropoff was concentrated in passenger planes and autos, two volatile categories that can swing sharply from one month to the next.
A more accurate measure of demand, known as core orders, slipped 0.3% in the month. The core number strips out transportation and military hardware. It was first decline in 12 months
Big picture: Businesses still have plenty of demand for big-ticket items despite high inflation and disruptions caused by the Russian invasion of Ukraine. Orders for durable goods have climbed 10% over the past year.
Headwinds are growing, however. The conflict in Ukraine could tax already strained global supply chains, as could a coronavirus outbreak in China. At home, the Federal Reserve is moving to raise interest rates to try to bring down high inflation.
Economists predict U.S. growth will slow this year, but keep expanding at a steady pace.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open modestly higher in Thursday trades.