New orders for goods designed to last more than three years fell by the most in seven months and a closely watched measure of business investment stagnated, reinforcing the indication of a factory slowdown seen earlier in the ISM manufacturing report.
Placements dropped 5.7% in March, almost double the 3.0% forecast and February's result was lowered to 4.3% from 5.7%, according to the Commerce Department in Washington, D.C. today. Orders are off 1.5% from last March, the first negative annual measurement this year.
Excluding bookings in the transportation sector, orders declined 1.4% for the first two month drop since last July and August. Economists had predicted that orders would pick up 0.5%. February's orders were adjusted down to -1.7% from -0.5% for the worst reading since last August. Orders for commercial aircraft slid 48.2 % on the month. Boeing Company of Chicago reported 39 new aircraft requested down from 179 in February.
Business in the non-defense capital goods excluding aircraft category moved up 0.2%, just below the 0.3% estimate from the Bloomberg poll of economists. This measure is often used by analysts as a proxy for industrial capital spending plans. February orders were revised down to -4.8% from -2.7%, the weakest reading since last July's 5.6% decrease.
Shipments of the above capital goods, a statistic employed in GDP calculations, rose 0.3% in March, much lower than the 0.8% projection and the revised 1.2% gain in February.
Automobile orders rose 0.2% in March after a 4.7% surge in February. Cars and light trucks sold at a 15.2 million unit annualized pace in March and have averaged 15.3 million a month in annual sales since last November, the first period above 15.0 million since early 2008.
Chief Market Strategist