WASHINGTON: New orders for key U.S.-made capital goods fell sharply in February as demand for machinery and other products slumped, suggesting a deepening contraction in business investment that analysts said signaled the economy was already in recession.
These so-called core capital goods orders were previously reported to have increased 1.1per cent in January. "Given that profits are likely now declining, financial market conditions have tightened and the economy contracting, business investment will take it on the chin," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania."Business investment in equipment will drop sharply in the second quarter."
Recessions in the United States are called by the National Bureau of Economic Research. The NBER's business cycle dating committee does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries.
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