Orders for U.S. durable goods fell sharply in March, hurt by a steep drop in commercial aircraft, but orders that reflect business investment plans rose modestly, the government said Wednesday in a report that added to indications of a slowdown in factory activity. The Commerce Department reported that orders for durable goods-expensive manufactured items expected to last at least three years-fell 5.7 percent last month following a 4.3 percent gain in February. The March decline was the biggest in seven months. The drop was led by a 48.2 percent decline in orders for commercial aircraft, which often are volatile month to month. Excluding aircraft and transportation demand, orders fell 1.4 percent, the second consecutive drop in the category. Core capital goods, a closely watched gauge of business spending plans, rose 0.2 percent in March after falling 4.8 percent the previous month. Economists expect business investment contributed to economic growth in the January-March quarter, which likely accelerated to a healthy 3.1 percent annual rate from the stagnant 0.4 percent rate in the fourth quarter of 2012. The government will release its first estimate for first-quarter gross domestic product (GDP) on Friday. However, many economists believe growth has started to slow to an annual rate of 2 percent or less in the current April-June quarter due to higher taxes for most workers and steep government spending cuts.
