Orders for U.S. manufactured goods experienced a drop in February following nine months of growth, according to a Wednesday report from the Department of Commerce.
Last month, orders for items from U.S. factories dropped by about 1.1 percent, a decline economists have largely attributed to the disruptions in economic activity during the severe winter storm in Texas, as well as other states in the South and Midwest.
In Wednesday’s report, the Commerce Department found that business investment dropped 0.8 percent in February following increases of 0.6 percent in January and 1.5 percent in December.
The report noted a 1.6 percent decrease in demand for commercial aircraft, part of a larger trend of losses in the airline industry due to the drop in air travel during pandemic lockdown orders across the globe.
Meanwhile, orders for motor vehicles and parts dropped 8.7 percent in February after falling by just 0.9 percent in January. This comes amid a global shortage of semiconductors, which serve as a critical component in cars and trucks, the AP reported.
“The biggest headwinds for manufacturing as we emerge from this pandemic are mostly about manufacturers getting the stuff they need,” Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, N.C., told Reuters Wednesday.
The winter storm that raged across Texas and the Southern U.S. also prompted several factories, including car manufacturers, to close plants amid freezing temperatures and poor weather conditions.
Warmer temperatures into the spring months, as well as the increased distribution of COVID-19 vaccines and President BidenJoe BidenThe Hill’s Morning Report – Biden leans heavily into gun control Justice Dept. faces risks, rewards with riot sedition charges Dems plan to squeeze GOP over filibuster MORE’s $ 1.9 trillion relief package, are expected to influence a rebound in orders for manufactured goods.
Andrew Hunter, senior U.S. economist at Capital Economics, told the AP, “With the weather returning to seasonal norms and the next fiscal stimulus payments already being distributed, orders likely will rebound in March.”
“With corporate borrowing costs still close to historic lows … we expect investment to continue expanding at a robust pace over the coming months,” he added.
- ^ The Associated Press (apnews.com)
- ^ Reuters (www.reuters.com)
- ^ forced to halt production (thehill.com)
- ^ President Biden (thehill.com)
- ^ Joe Biden (thehill.com)
- ^ The Hill’s Morning Report – Biden leans heavily into gun control (thehill.com)
- ^ Justice Dept. faces risks, rewards with riot sedition charges (thehill.com)
- ^ Dems plan to squeeze GOP over filibuster (thehill.com)
- ^ MORE (thehill.com)
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