U.S. farmers held back from buying more farm equipment in the first quarter in the face of falling commodity prices and damage caused by Washington's protectionist trade policies, U.S. media reported Friday.
Bloomberg news reported that farm equipment purchases plunged by an annualized 900 million U.S. dollars in the first quarter, the sharpest drop in three years.
The U.S. Department of Commerce "cited the drop in agricultural machinery purchases as a contributor to the paltry 0.2 percent quarterly rise in overall business spending on equipment, also the weakest performance since 2016," the report said.
Signs of financial pressure on farmers as well as machinery dealers and suppliers reflect the "rising political danger" for the current U.S. administration, the report said.
The Commerce Department released the first-quarter gross domestic product report Friday, which showed the U.S. economy grew at an annual rate of 3.2 percent during the three-month period.
As detailed data indicated that the faster-than-expected expansion was mostly driven by exports and private inventory investment, and that consumer spending and business investment showed weaker gains, economist worried that a lack of momentum domestically might drag growth in the future.
"Underlying momentum in the domestic economy was particularly weak," Diane Swonk, chief economist at the Chicago-based Grant Thornton LLP, wrote in an article.
"Prospects for growth in the second quarter now look much worse because bloated inventories must be depleted. The hope is that consumers bounce back to do some heavylifting," she added.
