The numbers: Orders at U.S. factories for long-lasting goods such as computers and cars rose 0.8% in March and business investment rebounded after the first decline in a year, signaling the economy is still growing at a steady pace.
The increase matched the estimate of economists polled by the Wall Street Journal.
Orders for U.S durable goods — products meant to last at least three years — increased for the sixth time in the past seven months.
What’s more, the initially reported 2.2% decline in February was revised to show a smaller 1.7% drop, the government said Tuesday.
Another measure of factory conditions, known as core orders, advanced 1% in the month. The core number strips out transportation and military equipment and gives a better sense of underlying demand in the U.S. economy.
These orders fell in February for the first time in a year, so the rebound is encouraging. They are viewed by investors as a signal of future business prospects.
Big picture: Factories are pumping out huge amounts of goods and would produce even more if they could hire more workers and get supplies on time. Shortages of both labor and materials have dogged them for the past year and contributed to the worst U.S. inflation in four decades.
The Federal Reserves plans to raise interest rates rapidly over the next year to try to curb inflation, but it runs the risk of reducing demand too much and triggering a recession.
Most economists don’t think a downturn is imminent or inevitable,. however.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open lower in Tuesday trades.