U.S. Manufacturing Orders Surpass Expectations in March, Boosting Economic Growth

U.S. manufacturing orders for key capital goods exceeded expectations in March, indicating that business equipment spending contributed to economic growth in the first quarter. According to Jin10, the U.S. Census Bureau reported on Wednesday that orders for non-defense capital goods excluding aircraft rose by 3.3% in March, surpassing the market expectation of 0.5% and revised from a previous value of 1.6%. Shipments of core capital goods increased by 1.2% in March, following a 1.3% rise in February. The surge in business equipment spending is driven by the growing demand for information processing equipment amid the artificial intelligence spending boom. However, concerns persist that the ongoing conflict between the U.S., Israel, and Iran, which has raised oil and other commodity prices, might lead businesses to be more cautious about new capital investments. Economists anticipate that business equipment investment in the first quarter helped offset the expected slowdown in consumer spending. A Reuters survey of economists forecasts a 2.3% annualized growth rate for U.S. GDP in the first quarter. In the fourth quarter, economic growth nearly stalled, with GDP increasing by only 0.5%. The Commerce Department's Bureau of Economic Analysis is set to release the preliminary estimate of first-quarter GDP on Thursday.