Both the manufacturing and services sectors showed unexpected weakness in the latest data out Wednesday.
New orders at U.S. factories rose a smaller-than-expected 1% in February as orders for machinery and metals fell, a Commerce Department report showed.
Meanwhile, the Institute for Supply Management said its monthly non-manufacturing index, which measures the services sector of the U.S. economy, fell to 52.4 in March from 54.3 in February. Economists had expected a median reading for March of 55.0.
A number above 50 indicates growth, while anything below 50 denotes contraction.
Analysts polled by Reuters were expecting overall factory orders to rise 1.8% after a downwardly revised January fall of 5.7%, which was the biggest decline in more than
Orders for durable goods, items meant to last three years or more, were revised lower to a 1.7% gain in February from an initial rise of 2.5% reported last week. Orders for primary metals fell 3.8 percent, machinery orders fell 1% and electrical equipment and appliances fell 5.8
Nondefense capital goods orders excluding aircraft, considered a proxy for business spending, fell a revised 2.4%, doubling the 1.2% fall initially reported last week. In January, this category fell 6.2%.
Stripping out defense goods, factory orders rose 1% after a 5.5% fall in January, which was the largest monthly slide on record.
Transportation orders rose 8.9%, largely due to a rebound in volatile orders for civilian aircraft, which rose 88.4% after a 60.4% fall in January. Motor vehicle body, parts and trailer orders rose 1.1% following an 8% fall in January.
Excluding the volatile transportation sector, factory orders for February fell 0.4%, following a 2.5% fall in January.