US durable goods orders, shipments rebound in February

Wednesday 26 March 2014 14.04
US urable goods orders rose 2.2% as demand increased in February
US urable goods orders rose 2.2% as demand increased in February

Orders for long-lasting US manufactured goods rebounded in February and shipments snapped two months of declines in a row, providing fresh signs the economy was shaking off some of its winter gloom.

The Commerce Department said today that durable goods orders rose 2.2% as demand increased almost across the board.

Orders of these goods, which range from toasters to aircraft and are meant to last three years or longer, had dropped 1.3% in January.

Economists had expected orders to rebound 1% last month.

The report joined other data such as industrial production, retail sales and employment in suggesting a pick-up in economic growth after an unusually harsh winter chilled activity at the end of 2013 and the beginning of this year.

First-quarter growth is expected to have slowed from the fourth-quarter's annualised 2.4% rate. Growth has also been held back as businesses work through a pile of unsold goods that was accumulated in the second half of 2013.

The durable goods report showed overall shipments increased 0.9% in February, after two consecutive months of declines.

Unfilled orders also increased after being flat in January.

But there was a slight wrinkle in the otherwise fairly upbeat report. Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, unexpectedly fell 1.3% in February after rising by a revised 0.8% the prior month.

Economists had expected orders for these core capital goods to increase 0.7% in February after a previously-reported 1.5% advance in January.

Shipments of the core capital goods, however, rose 0.5% last month. Shipments of these goods are used to calculate equipment spending in the government's GDP measurement. They had declined 1.4% in January.

Last month, orders for transportation equipment increased 6.9% as bookings for cars recorded their largest gain in a year. Transportation orders had declined 6.2% in January.

There were also increases in orders for primary metals, fabricated metal products and computers and electronic products. Orders for machinery fell for a second month in a row as did bookings for electrical equipment, appliances and components.