Washington, D.C., Mar. 24--The Commerce Department reported today that orders for durable goods rose by 2.5% last month. That was an improvement from the revised 2.7% drop registered in January and represented the largest increase since October.
February's performance was better than economists were expecting. Those surveyed by Dow Jones Newswires and CNBC had been expecting an increase of just 1.6%.
Estimates on durable goods are volatile and subject to revision; analysts caution against using monthly figures when trying to tell where the U.S. economy is heading.
Other recent economic reports indicate that manufacturing activity is picking up. A key report issued this month by the Institute for Supply Management showed manufacturing activity in the U.S. rose during February for a ninth straight time. Also, U.S. industrial production has gone up two months in a row.
But many plants continue to operate well below full capacity and employment is still weak. Manufacturers cut jobs in February for the 43rd month in a row. Hardest hit by the 2001 recession, manufacturers over the past three years have had to cope with difficult economic times at home and abroad as well as compete against a flood of imports flowing in the U.S.
The durable-goods report for February showed increases in most categories. Transportation orders advanced by 9.9%, the biggest surge since July 2002. January orders fell 10.5%. Non-defense aircraft orders increased 33.8% and defense aircraft demand surged 61.1%. Cars and parts rose 5.0%, after dropping 4.4% in January.
Excluding transportation when calculating demand for all durable goods, overall orders dropped by 0.3%.
Capital-goods orders in February advanced by 4.1% after falling 3.5% the prior month. There was a 11.6% jump in demand for defense-related items. Excluding defense orders from calculations, overall durable-goods orders went up by 2.0%.
Orders rose by 2.9% for non-defense capital goods, which are meant to last at least 10 years and act as an indicator of business spending. Demand fell 2.7% in January. Non-defense capital goods excluding aircraft demand for January fell 0.3%, revised lower from a previously reported 3.6% increase.
Orders for computers and electronic products increased by 1.2% in February.
Machinery orders rose by 1.3%, as did demand for primary metals. Fabricated metal products dropped 3.4%. Orders for electrical equipment and appliances decreased by 0.4%.
Durable-goods inventories went up by 0.4%, unfilled orders rose by 0.6%, and shipments increased 0.8%.
