Durable good orders unexpectedly dropped in February, the Commerce Dept. said Wednesday.

New orders for manufactured durable goods last month fell 1.4%, to $231.3 billion, after rising 2% in January. Orders for transportation equipment led the decrease, falling 3.5%, to $69.5 billion.

Orders for nondefense capital goods excluding aircraft — a proxy for business capital expenditures — also fell 1.4%.

Unfilled orders for manufactured durable goods in February fell 0.5%, to $1,156.9 billion, after rising 0.3% in January. Again, unfilled orders for transportation equipment led the decrease, falling 0.6%, to $731.6 billion.

A Bloomberg story said that the median forecast of 81 economists surveyed by Bloomberg was a rise in durable goods orders of 0.2%.

“Demand for American-made products may be softening as economies abroad struggle to accelerate and a stronger dollar makes it more attractive for foreign customers to buy from elsewhere,” Bloomberg wrote. “Increased business spending will be needed to provide a boost to the economy following what some economists are projecting as lackluster growth in the first quarter.”

Inventories of manufactured durable goods last month increased 0.3%, to $413 billion. That inventory level is the highest since the series was first published on a NAICS basis in 1992 and followed a 0.3%January increase, the Commerce Department said.

The markets are following economic data closely, because signs of a healthy economy are likely to cause the Federal Reserve’s Open Market Committee to raise currently zero-bound benchmark interest rates.

In an interview with The New York Times published Tuesday, Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said only if the Fed is “really disappointed in the stream of [economic] data that come in” would it not raise interest rates by September.

, , ,

Leave a Reply

Your email address will not be published. Required fields are marked *