Business spending in U.S. remains sluggish

WASHINGTON — U.S. business investment spending plans fell for a seventh straight month in March, weighed down by a strong dollar and lower energy prices, suggesting the economy was struggling to rebound from a recent soft patch.

The report from the Commerce Department on Friday came on the heels of tepid data on retail sales, employment and housing starts that have hinted at insufficient growth momentum that could prompt the Federal Reserve to delay raising interest rates until lat- er this year.

“This is consistent with a sluggish rebound in growth. It’s shedding more doubt on the Fed’s willingness to raise rates midyear,” said Gennadiy Goldberg, an economist at TD Securities in New York.

Nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, declined 0.5 percent last month after a revised 2.2 percent drop in February, which was the biggest decline since July 2013.

The so-called core capital goods orders were previously reported to have declined 1.1 percent in February. Economists had forecast these orders gaining 0.3 percent last month.

The weakness mirrors other manufacturing indicators such as industrial production and various regional factory surveys.

The dollar fell against a basket of currencies after the report, while prices for U.S. government debt rose. U.S. stocks were trading marginally higher as investors were cheered by strong results from Google, Amazon.com and Microsoft.

The Fed has kept overnight interest rates near zero since December 2008, but a number of officials have said an increase will likely be considered at its June policy-setting meeting.

REUTERS