Demand for U.S.-made durable goods rose a seasonally adjusted 0.5% to $178.1 billion U.S. in February, the third straight increase in the key forward-looking indicator, according to Commerce Department data released Wednesday.
Orders for machinery and civilian aircraft were strong in February, while orders for autos, defense goods and electronics declined. Orders for core capital goods excluding aircraft and defense rose 1.1%, a sign of rising capital spending by businesses.
Excluding the 0.7% drop in transportation goods, orders increased 0.9% to $132.1 billion, the third increase in the past four months.
Meanwhile, shipments of durable goods fell 0.6% to $179.8 billion U.S., led by fewer shipments of transportation goods. Excluding transportation, shipments rose 0.4%.
The 0.5% increase in durable goods orders was weaker than the 1.7% gain expected by economists surveyed by MarketWatch. However, January's orders were revised higher, from a 2.6% gain to 3.9%. December's orders were also revised higher.
Durable goods are expensive manufactured goods designed to last three years or longer. Movements in the data are extremely volatile on a monthly basis, but smoothed trends are a leading indicator of economic activity.
The data in the past eight months show the U.S. manufacturing sector is stirring from its steepest recession in 60 years, fueled by stronger demand from abroad and by the need to replenish depleted inventories as U.S. demand improves.
Compared with the first two months of 2009, orders are up 11.4%. Shipments are up 1.8%.
Shipments of core capital equipment goods increased 0.8% in February to $54.2 billion, a sign of increasing business investment.
Inventories of durable goods rose 0.3% in February to $303.9 billion U.S., an indication that the inventory correction has largely run its course. Unfilled orders rose 0.4% to $722.1 billion U.S., the largest increase since mid-2008.
Orders for transportation goods fell by 0.7%, led by a 19% decline in defense aircraft and a 1.9% decline in autos. Civilian aircraft orders rose 32.7% in February after jumping 135% in January. Shipments of transportation equipment fell 3.4% in February.
Orders for electronics excluding semiconductors fell 0.6%. Shipments of electronics including semiconductors fell 3%.
Orders for machinery rose 4.7% in February after falling 8.8% in January, as is typical in the first month of the quarter. Shipments of machinery rose 2.7%.
Orders for fabricated metals increased 1.9% and shipments rose 1.5%. Orders for primary metals increased 1.5% with a 2.4% gain in shipments.
Orders for electrical equipment decreased 3.3%, while shipments rose 1.3%.
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