In February, there was a solid increase in new orders for U.S.-manufactured goods, which is believed to be due to businesses ramping up orders before tariffs were imposed. The Commerce Department reported that factory orders went up by 0.6%, following a 1.8% rise in January. Economists had predicted a 0.5% increase. Year-on-year, factory orders saw a 1.5% growth in February.

Concerns are raised about the impact of President Trump's tariffs on manufacturing, which makes up 10.2% of the economy. Trump aims to use tariffs to generate revenue to balance his tax cuts and revive the country's declining industrial sector, but economists have differing opinions and believe that import duties could be damaging.

A recent report from the Institute for Supply Management indicated a return to contraction in the manufacturing sector in March, following two months of expansion, with tariff concerns being a major issue for businesses.

Manufacturers heavily rely on imported raw materials, and the anticipated increase in production costs due to tariffs might prompt companies to raise prices or even lay off workers to protect profits. The report also mentioned specific changes in orders for various industries such as a decline in commercial aircraft orders, an increase in motor vehicle orders, and steady figures in computer and electronic products orders.

Orders for non-defense capital goods excluding aircraft dropped by 0.2% in February, revised from a previously estimated 0.3% decrease. Shipments of core capital goods saw an increase of 0.8%, lower than the initial 0.9% reported. It is expected that business spending on equipment will pick up in the first quarter after a decline in the fourth quarter.