New orders for U.S. manufactured durable goods surged up by much more than anticipated in the month of February, according to a report released by the Commerce Department on Friday.
The report said durable goods orders jumped by 3.1 percent in February after slumping by 3.5 percent in January. Economists had expected durable goods orders to increase by 1.5 percent.
The bigger than expected increase in durable goods orders was partly due to a significant rebound in orders for transportation equipment, which spiked by 7.1 percent in February after plunging by 9.8 percent in the previous month.
Orders for non-defense aircraft and parts and defense aircraft and parts soared by 25.5 percent and 37.7 percent, respectively.
Excluding orders for transportation equipment, durable goods orders still climbed by 1.2 percent in February after edging down by 0.2 percent in January. Ex-transportation orders had been expected to rise by 0.5 percent.
The increase in ex-transportation orders was partly due to notable growth in orders for primary metals, machinery, and electrical equipment, appliances, and components.
The report also said orders for non-defense capital goods excluding aircraft, an indicator of business spending, surged up by 1.8 percent in February after falling by 0.4 percent in January.
"Overall, business equipment investment still appears to have slowed in the first quarter, probably to between 6% and 8% annualized," said Andrew Hunter, U.S. Economist at Capital Economics.
He added, "But some slowdown appeared inevitable after the double-digit gains in the second half of last year and, in any case, the latest business surveys suggest that the outlook over the coming months remains bright."
The Commerce Department also said shipments of durable goods climbed by 0.9 percent in February after rising by 0.5 percent in January.
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