Demand for long-lasting U.S. manufactured goods surged in February, though a gauge of planned business spending slipped after surging the previous month, suggesting factory activity continued to expand at a moderate pace.
Durable goods orders jumped 5.7 per cent as demand for transportation equipment rebounded strongly, the Commerce Department said on Tuesday. The rise last month in durable goods orders, which range from toasters to aircraft, reversed January’s 3.8-per-cent plunge.
Economists polled by Reuters had expected orders to rise 3.8 per cent after a previously reported 4.9-per-cent fall in January.
Excluding transportation, orders slipped 0.5 per cent after increasing 2.9 per cent in January. Economists had expected a 0.5-per-cent rise.
Non-defence capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 2.7 per cent, the largest decline since July. Orders for the so-called core capital goods had jumped 6.7 per cent in January and economists had expected a 1.2-per-cent drop last month.
However, core capital goods shipments, used to calculate equipment and software spending in the gross domestic product report, increased 1.9 per cent. That followed a 0.7-per-cent fall in January and suggested business spending would again contribute to growth this quarter.
Though the report was mixed, it was in line with other data, including industrial production and the Institute for Supply Management’s survey of national factory activity, that have shown a steady growth pace in manufacturing.
Overall orders for durable goods were buoyed by a 21.7-per-cent jump in transportation equipment as demand for civilian aircraft surged 95.3 per cent.
Boeing received orders for 179 aircraft, up from only two in January, according to information posted on its website. They were boosted by American Airlines, which placed 143 orders, including 42 for the grounded 787 Dreamliners.
Motor vehicle orders increased 3.8 per cent. Defence aircraft orders rose 7.6 per cent.