- Chris Low, chief economist at FTN Financial
Orders for US factory goods recorded the biggest rise in eight months in March, amid increased demand for transportation equipment. Yet, the underlying trend remained weak due to a strong Dollar. According to the Commerce Department, new orders for manufactured goods increased 2.1% following seven monthly drops, buoyed by a 13.5% advance in orders for transportation equipment. Orders in a key category that tracks business investment plans ticked up a 0.1%. It was the first advance in this category since last August. Manufacturing, which makes up around 12% of the US economy, has been derailed by the strong Greenback and plunging crude oil prices, which have been putting a squeeze on the profits of multinational corporations and oil companies. The Dollar has gained 12% versus the currencies of the nation's main trading partners since June amid expectations of monetary policy normalization and economists predict it could slash 0.6 percentage point off growth this year.
The factory data added to reports on auto sales, housing and employment in suggesting the US economy was regaining some momentum, but probably not fast enough to persuade the Fed to begin raising interest rates next month, as most analysts had estimated at the start of the year.
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