| Overall durable goods orders fell in February (1%) coming off a much steeper decline in January (5%). However, when you take out volatile spending on airplanes and defense spending, core capital investment by businesses grew 0.2%.
Why it matters: While this is mildly good news, and tempers the less-favorable large headline drop, business capital investment is barely treading water. In the last three months, combined growth has been small.
- In December it fell 0.2%.
Be smart: The pullback in investment is understandable and expected. Interest rates are rising, making investment more expensive, and economic uncertainty is rising.
- But: This data was from before the recent banking issues, which will likely cause lending to slow.
Bottom line: Business investment is unlikely to rebound strongly in March. That will put downward pressure on growth in the first quarter, which is otherwise shaping up to be strong. |
