New orders for key U.S.-made capital goods rebounded more than expected in February after two straight monthly declines and shipments surged, which could temper expectations of a sharp slowdown in business spending on equipment in the first quarter.
The Commerce Department's report on Friday could prompt economists to raise their economic growth estimates for the first three months of the year. They were slashed last week after data showed retail sales fell in February for the third month in a row.
The Federal Reserve on Wednesday painted an upbeat picture of the economy when it raised interest rates and forecast at least two more increases for 2018.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, jumped 1.8 percent last month. That was the biggest gain in five months and followed a downwardly revised 0.4 percent decrease in January.
Economists polled by Reuters had forecast those orders rising only 0.8 percent in February after a previously reported 0.3 percent decline in January. Core capital goods orders increased 7.4 percent on a year-on-year basis.
Shipments of core capital goods increased 1.4 percent last month, the biggest advance since December 2016, after an upwardly revised 0.1 percent gain in January. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
They were previously reported to have slipped 0.1 percent in January. Business spending on equipment powered ahead in 2017 as companies anticipated a hefty reduction in the corporate income tax rate. The Trump administration slashed that rate to 21 percent from 35 percent effective in January.
U.S. financial markets were little moved by the data as investors worried that President Donald Trump's announcement on Thursday of tariffs on up to $60 billion of Chinese goods could start a global trade war.
Prices of U.S. Treasurys were mixed while U.S. stock index futures were largely flat. The dollar fell against a basket of currencies.