The Census Bureau found that durable goods orders rose 2.2 percent in February, reversing January’s 3.6 percent decline. Much of last month’s decrease, however, was due to the large jump in December new orders. The longer-term trend shows the upward trajectory for durable goods orders, with year-over-year growth of 12.2 percent.
Strength was observed in several key durable goods sectors. The largest monthly gains were in machinery (up 5.7 percent), transportation equipment (up 3.9 percent), computers and electronic products (up 2.7) and capital goods (up 2.3 percent). Within each of these categories, there were solid increases among aircraft, computer, communications equipment and defense capital goods.
Core capital goods – or nondefense capital goods excluding aircraft – rose 1.2 percent. Two sectors experienced declines in new orders in February: electrical equipment, appliances and components (down 2.5 percent) and other durable goods (down 0.6 percent).
Meanwhile, shipments of durable goods fell 0.4 percent, following a paltry gain of 0.1 percent the previous month. Transportation and defense capital goods led the decline.
Durable manufacturing shipments excluding transportation were up 0.3 percent, while the figure which excludes defense shipments was unchanged. Among shipments, the strongest gains occurred in the machinery, computer and communications sectors. Motor vehicle shipments rose 1.2 percent.
Unfilled orders and inventories grew 1.3 percent and 0.4 percent in February, continuing a long streak for both of them.
Overall, durable goods orders rose modestly, with the 2.2 percent gain below some analysts’ expectations. Indeed, other measures have shown some easing of activity in the most recent month. Yet, the larger story remains a positive one, with orders and shipments continuing to grow over the course of the past year.
Chad Moutray is chief economist, National Association of Manufacturers.