“Demand for long-lasting U.S. manufactured goods was the weakest in three years in March and a gauge of business spending plans fell, suggesting the economy lost momentum as the first quarter drew to a close.
Durable goods orders dropped 4.2 percent, the largest decline since January 2009, the Commerce Department said on Wednesday after a downwardly revised 1.9 percent increase in February.
Economists had forecast orders for durable goods, which range from toasters to aircraft, falling 1.7 percent after a previously reported 2.4 percent rise in February.
“This adds to the evidence that momentum in the economy sort of fell flat in March,” said Ellen Zentner, a senior U.S. economist at Nomura Securities in New York.
The data came as officials at the Federal Reserve met for a second day to deliberate on policy. The U.S. central bank is not expected to make any policy changes and will issue its statement at the end of the meeting around 12:30 p.m. (1630 GMT)
U.S. stock index futures pared gains on the data, while prices for Treasury debt pared losses to stand little changed. The dollar extended losses against the yen.
The report was the latest to show the manufacturing sector losing a step in March and it added to signs that the economy ended the first quarter on a soft spot.
Data last week showed industrial production was flat in March for a second straight month, while some gauges of regional factory activity weakened in April.
In addition to weakness in factory gauges, U.S. jobs growth slowed sharply last month and consumer confidence ebbed.
Manufacturing has been one of the main sources of economic growth, but is slowing as euro zone economies slide into recession and China cools.
Even though there are signs of some weakening in economic data early in the second quarter, economists believe the bar remains high for the Fed to ease policy further through a third round of bond purchases or quantitative easing….”
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I don’t know what to make of this, because it was always going to happen.
2011 was backloaded with orders for durable goods because of the one time, depreciation rule. Companies, rather than needing to use the straight-line depreciation method, could just right off the whole amount in the first year.
That level of orders was never sustainable.
Fuck me, *write