WASHINGTON (Reuters) - New orders for key U.S.-manufactured capital goods rose moderately in March and data for the prior month was revised lower, suggesting business spending on equipment was likely sluggish in the first quarter.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.2% last month, the Commerce Department's Census Bureau said on Wednesday. Data for February was revised lower to show these so-called core capital goods orders rising 0.4% instead of 0.7% as previously reported.

Economists polled by Reuters had forecast core capital goods orders gaining 0.2%.

Business spending on equipment has struggled in the aftermath of 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022 to tame inflation. Though the U.S. central bank is expected to start lowering rates this year, the timing of the first cut is uncertain as inflation remains elevated amid a resilient economy.

Core capital goods shipments rebounded 0.2% after falling 0.6% in February. Non-defense capital goods orders surged 5.4%, but shipments of these goods slumped 1.5% after increasing 2.4% in February.

Shipments of these goods go into the calculation of the business spending on equipment component in the gross domestic product report. The government is scheduled to publish its advance estimate of first-quarter GDP on Thursday.

Economists polled by Reuters estimated that GDP increased at a 2.4% annualized rate last quarter. The economy grew at a 3.4% pace in the October-December quarter. Business spending on equipment is forecast to have posted a mild gain after contracting for two straight quarters.

But manufacturing, which accounts for 10.4% of the economy is on the rebound. Orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, surged 2.6% in March after downwardly revised 0.7% advance in February.

Durable goods orders were previously reported to have risen 1.3% in February.

An Institute for Supply Management survey this month showed manufacturing grew for the first time in 1-1/2 years in March.