Orders for U.S. manufactured durable goods rebounded in February after showing a notable drop in January, according to a report released by the Commerce Department on Wednesday, although orders rose by somewhat less than anticipated.
The report showed that durable goods orders rose by 2.2 percent in February following a revised 3.6 percent decrease in January.
Economists had expected orders to increase by about 2.9 percent compared to the 3.7 percent drop that had been reported for the previous month.
Peter Boockvar, managing director at Miller Tabak, said, "After the distorted level of orders in late '11 and January '12 due to the expiration of the 100% depreciation tax credit (going to 50% in '12), February orders were just ok and didn't see the snapback hoped for after the drop in January."
"While there is a lot of optimism about the U.S. economy, GDP growth is still only going to be around 2% in Q1 and the economies in Europe and Asia are slowing," he added.
A turnaround by orders for transportation equipment contributed to the rebound in durable goods orders, with transportation orders rising by 3.9 percent in February after tumbling by 5.3 percent in January.
Excluding the increase in orders for transportation equipment, durable goods orders increased by a more modest 1.6 percent in February compared to a 3.0 percent decrease in January.
The monthly increase in ex-transportation orders came in slightly above economist estimates for a 1.5 percent increase.
A 5.7 percent jump in orders for machinery contributed to the increase in ex-transportation orders along with a 2.7 increase in orders for computers and electronic products.
The report also showed that orders for non-defense capital goods excluding aircraft, an indicator of business spending, rose by 1.2 percent in February compared to a 3.7 percent drop in January.
Inventories of durable goods increased for the twenty-sixth consecutive month, rising by 0.4 percent in February after climbing by 0.6 percent in the previous month.
Meanwhile, the Commerce Department said shipments of durable goods fell by 0.4 percent in February following a 0.1 percent increase in January.
by RTT Staff Writer
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