Orders for U.S. durable goods increased more than forecast in February, a sign companies are confident about the outlook for the economy.
Bookings for goods meant to last at least three years rose 1.7% after a 2.3% advance the prior month that was larger than previously estimated, Commerce Department data showed Friday. The median forecast of economists surveyed by Bloomberg called for a 1.4% increase.
A sixth straight gain in orders for durable goods minus transportation equipment underscores rising demand that will help to broaden economic growth. Business has the potential of increasing even more should Washington lawmakers succeed in reducing corporate taxes and regulations.
Economists’ estimates for durable orders ranged from a drop of 0.7% to a gain of 3.5%. The prior month’s advance was revised from a previously reported 2%.
Excluding transportation equipment demand, which is often volatile, orders increased 0.4% after a 0.2% gain.
The weaker part of the report was in the figure measuring future business investment in items like computers, engines and communications gear. Bookings of non-defense capital goods excluding aircraft unexpectedly fell 0.1% , compared with a median projection for a 0.5% advance. January was revised to a 0.1% increase.
At the same time, those orders were up at a 9.1% annualized rate in the three months ended in February.
Shipments of capital goods excluding aircraft and military hardware, used in calculating gross domestic product, rose 1% in February.
The report also showed bookings for civilian aircraft climbed 47.6% following an 83.3% surge at the start of the year. (Boeing Co., the Chicago-based aerospace company, said it received 43 orders for aircraft in February, up from 26 in the prior month, and deliveries also increased.)
The Commerce Department’s report showed a 0.8% drop in bookings for motor vehicles and parts, as auto dealers deal with high inventory. Industry data showed car sales in February were little changed from the previous month. Cars and light trucks sold at a 17.5 million annualized rate, according to Ward’s Automotive Group.
Orders for military capital equipment decreased 8.3%, and demand for non-defense durable goods rose 2.1% for a second month.
By Shobhana Chandra, with assistance from Jordan Yadoo.