US business spending on equipment weakening as demand for goods slows

Core capital goods orders fall 0.4% in MarchShipments of core capital goods drop 0.4%Goods trade deficit narrows 8.1%

WASHINGTON, April 26 (Reuters) – New orders for key U.S.-manufactured capital goods fell more than expected in March and shipments declined, suggesting that business spending on equipment likely remained a drag on economic growth in the first quarter.

But the economy appears to have stayed on a solid growth path last quarter, with other data from the Commerce Department on Wednesday showing the goods trade deficit narrowed sharply due to a rebound in exports. Even though business spending on equipment weakened, demand remained strong for goods like computers and electronic products as well as electrical equipment, appliances and components.

“The economy isn’t going off the rails yet,” said Christopher Rupkey, chief economist at FWDBONDS in New York.

Orders for non-defense capital goods…

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