<p>US factory data suggests ;that economic growth has slowed more than predicted during the first quarter. Order sheets show smaller quantities and business spending on capital goods has decreased. ;</p>
<p>The Commerce Department announced this week that new orders for manufactured goods have declined by 1.7% as a result of decreasing demand. ;Such shrinkage has been reported during 14 of the past 19 months with a small 1.2% increase in January (downwardly revised from previously estimated 1.6%). ;</p>
<p>February saw a 2.5% drop in orders for non-defense capital goods (not including aircraft). These &ldquo;core capital goods&rdquo; are viewed as a measure of spending plans and business confidence. ;</p>
<p>&#8220;This morning&#8217;s report suggests a more sluggish manufacturing sector in the early part of the quarter,&#8221; says Barclays economist Jesse Hurwitz. Estimates for first-quarter GDP growth are currently sitting below a 1% rate. ;</p>
<p>Economic growth slowed to a 1.4% annualized pace during the fourth quarter of 2015. This week&rsquo;s report adds to weak trade and consumer spending data in suggesting further economic growth moderation. ;This data altered US government bond prices while the US dollar dropped to a 2-week low vs the Japanese yen. ;</p>
<p>Manufacturing (roughly 12% of the US economy) has long faced pressure from a ;weak global demand and a strong US dollar, which have undermined exports of factory goods in addition to business owners&rsquo; efforts to reduce an inventory overhang. ;The sector has also been blasted by investment cuts by energy firms as they struggle to cope with smaller profits from cheaper oil. ;</p>
<p>But the worst of it seems to be over, reports Reuters. &ldquo;We remain hopeful for some upcoming improvement in the data as many of these headwinds have either passed or faded,&#8221; says economist Dan Silver of JP Morgan. ;</p>
<p>A survey last week shows an expansion in manufacturing activity &ndash; the first in six months. The US dollar is bouncing back and the slide in oil prices seems to have slowed. ;&#8220;We have also been encouraged somewhat by some other more timely manufacturing indicators that have turned more mixed lately following a period of more widespread and severe weakness,&rdquo; says Silver. ;</p>
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