Capital Goods Orders Surge Amid Global Tensions

New data from the Commerce Department indicates a larger-than-expected increase in orders and shipments for U.S.-manufactured capital goods in February. Despite ongoing geopolitical tensions with Iran impacting oil prices and supply chains, business spending on equipment shows resilience. Economists predict potential challenges due to prolonged high energy prices.

WASHINGTON, April 7 (Reuters) - In February, U.S.-manufactured capital goods experienced a notable rise in both orders and shipments, as reported by the Commerce Department. This growth occurred in the wake of January's downturn, linked to severe weather conditions.

Despite the ongoing U.S.-Iran conflict affecting global oil and supply chains, core capital goods orders highlighted a 0.6% increase, even as the market braces for possible downtrends. Business investment remains buoyed by artificial intelligence and data center construction, amidst tax incentives supporting manufacturing growth.

As geopolitical uncertainties loom, economists express concerns about shipment disruptions and their impact on business investments. With durable goods orders dropping by 1.4% in February, the economic landscape continues to adapt to fluctuating conditions and emerging global market pressures.