ORDERS for long-lasting US manufactured goods unexpectedly rose in February as businesses rushed to avoid potential price increases from tariffs, likely boosting capital expenditure in the first quarter.
But the report from the Commerce Department 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, reports Reuters.
President Donald Trump has announced a blizzard of tariff actions since taking office in January. Economists have warned that the manner in which 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.
orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, increased 0.9 per cent after advancing by an upwardly revised 3.3 per cent in January, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast durable goods orders would fall 1.0 per cent.
Primary metals orders rose 1.2 per cent, while those for fabricated metal products rebounded 0.9 per cent. Electrical equipment, appliances and components orders jumped 2.0 per cent.
Economists attributed the rise in orders for these goods to front-loading ahead of tariffs, adding that trade policy uncertainty and higher borrowing costs remained constraints for manufacturing, which accounts for 10.3 per cent of the economy.
Mr Trump has imposed a new 20 per cent duty on all imports from China and 25 pr cent on goods from Canada and Mexico that are not compliant with a North American trade agreement.
The US president has fully restored 25 per cent tariffs on steel and aluminium from Canada, Mexico, EU and other countries, and is set to announce higher US 'reciprocal tariffs' to match the duty rates of trading partners and offset non-tariff barriers.
Mr Trump also has said that he will soon impose sectoral tariffs on imported autos, semiconductors and pharmaceuticals.
'The demand data show conditions are not fuelling a broad and sustained recovery in capex spending,' said Shannon Grein, an economist at Wells Fargo. 'Small business intentions around capital spending remain historically low as many businesses, like the Fed, are sitting and waiting for clarity.'
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But the report from the Commerce Department 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, reports Reuters.
President Donald Trump has announced a blizzard of tariff actions since taking office in January. Economists have warned that the manner in which 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.
orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, increased 0.9 per cent after advancing by an upwardly revised 3.3 per cent in January, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast durable goods orders would fall 1.0 per cent.
Primary metals orders rose 1.2 per cent, while those for fabricated metal products rebounded 0.9 per cent. Electrical equipment, appliances and components orders jumped 2.0 per cent.
Economists attributed the rise in orders for these goods to front-loading ahead of tariffs, adding that trade policy uncertainty and higher borrowing costs remained constraints for manufacturing, which accounts for 10.3 per cent of the economy.
Mr Trump has imposed a new 20 per cent duty on all imports from China and 25 pr cent on goods from Canada and Mexico that are not compliant with a North American trade agreement.
The US president has fully restored 25 per cent tariffs on steel and aluminium from Canada, Mexico, EU and other countries, and is set to announce higher US 'reciprocal tariffs' to match the duty rates of trading partners and offset non-tariff barriers.
Mr Trump also has said that he will soon impose sectoral tariffs on imported autos, semiconductors and pharmaceuticals.
'The demand data show conditions are not fuelling a broad and sustained recovery in capex spending,' said Shannon Grein, an economist at Wells Fargo. 'Small business intentions around capital spending remain historically low as many businesses, like the Fed, are sitting and waiting for clarity.'
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