The numbers: Orders for durable or long-lasting goods fell in February for the first time in four months and business investment continued to soften, reflecting a slower U.S. economy early in the new year.
Durable-goods orders sank 1.6%, largely because of fewer bookings for commercial aircraft and defense-related hardware, the Commerce Department said Tuesday. Economists surveyed by MarketWatch had forecast a 2.1% decline.
Stripping out transportation, orders rose a scant 0.1%. Transportation often exaggerates the ups and downs in orders because of lumpy demand from one month to the next.
What happened: Orders plunged 31% for commercial aircraft, a category that often sees large swings. They also fell slightly for new cars and trucks.
Demand for heavy machinery, computers and networking gear also declined.
Orders rose for electrical equipment, appliances and primary metals used in an array of products.
A key measure of business investment, known as core orders, fell for the third time in four months and the fifth time in the last seven. These orders dipped 0.1%.
Investment has been flat for the last three months and it’s grown just 2.6% in the past year, down from a 10% pace less than a year and a half ago.
The originally reported 0.3% increase in durable-goods orders in January was revised down to 0.1%.
Durable goods are basically any product for consumers or businesses that are supposed to last at least three years.
Big picture: The economy has moved sideways early in the new year.
Consumers have cut back on spending and businesses are not investing as rapidly. Festering trade tensions with China, a weaker global economy and rising odds of recession have made households and companies more cautious.
There are some signs growth might be picking up as the spring approaches, but more evidence is needed to alter the current view of the economy.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open mixed in Tuesday trades.
The 10-year Treasury yield
rose slightly to 2.47%. Mortgages, auto loans and other common forms of borrowing are tied to changes in the 10-year note.
The yield has fallen steadily from a seven-year high of 3.23% in October owing to greater worries about the U.S. economy.