New orders for manufactured durable goods increased by $5.0 billion, or a solid 2.2%, to $229.4 billion in February, according to the U.S. Commerce Department, in a data issuance made at 8:30 (EDT) this morning. That increase followed back-to-back declines in this volatile series in December and January. Durable goods are long-lived articles, including washing machines, machinery, toasters, computers, and jet aircraft that are supposed to last at least three years.
Excluding transportation goods, such as aircraft, actual orders edged up by 0.2% last month. Transportation-related goods are taken out of the mix to get the so-called core rate for durable goods orders given the high price tag on this sector's offerings, and the obvious skewing of the aggregate total by products, such as cars and aircraft.
All told, transportation equipment, which had been down for two consecutive months, rose 6.9%. The biggest contributor to this sector gain was non-defense aircraft and parts.
Meanwhile, in a closely watched category for its implications for capital spending on the part of the nation's businesses, the government reported that nondefense orders for capital goods fell 2.8% last month. That was the lone depressant in this report, which compared with the very negligible overall gain that had been forecast for the month.
Taking a look at the various industries that make up the durables report, we find that there was strength last month in orders for primary metals, fabricated metals, computers, motor vehicles and parts, and defense aircraft. On the other hand, the following categories constrained aggregate demand: machinery, electrical equipment, and capital goods.
Looked at in its entirety, this was a decent report, but one that causes some concerns given the dip in capital goods demand, which is always somewhat worrisome. - Harvey S. Katz, CFA
At the time of this article's writing, the author did not have positions in any of the companies mentioned.