Orders for long-lasting U.S. manufactured goods unexpectedly rose in February as businesses rushed to avoid potential price increases from tariffs, likely boosting capital expenditure in the first quarter. However, the report from the Commerce Department on Wednesday did not change economists' expectations that economic growth was slowing considerably in the first quarter as businesses and households grapple with a fluid import duty environment. Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, increased 0.9% after advancing by an upwardly revised 3.3% in January, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecasted that durable goods orders would fall 1.0%.
President Donald Trump has announced a blizzard of tariff actions since taking office in January. Economists have warned that the way the tariffs are being handled was not supportive of economic activity. "There is tremendous uncertainty coming from Washington, but companies are not just holding their breath waiting for the other tariff shoe to drop, they are actively ordering up more equipment to beat the price increases once the trade war sanctions jack up the cost of the goods and materials they need to even higher levels," said Christopher Rupkey, chief economist at FWDBONDS.
Source: Reuters
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