Orders placed with U.S. factories for business equipment rebounded in January by the most in six months, a sign demand is withstanding concerns about slower global growth and the trade war with China.
Non-military capital goods orders excluding aircraft -- a proxy for business investment -- gained 0.8%, after a 0.9% decline the prior month, according to Commerce Department figures released Wednesday. The median forecast in a Bloomberg survey called for a 0.2% increase. The broader measure of bookings for all durable goods, or items meant to last at least three years, unexpectedly rose.
The improvement in demand, underscored by orders for machinery and communications equipment, suggests a solid start to the year for manufacturers that should support economic growth in the first quarter.
At the same time, other data for February give a more muted picture, with the Institute for Supply Management’s factory index falling to a two-year low in February and manufacturers adding the fewest workers since 2017.
Some figures that are used to calculate gross domestic product also were more encouraging: Shipments of non-military capital goods excluding aircraft rose 0.8% after a revised 0.1% increase and exceeding the Bloomberg survey median of a 0.2% decline. Total durable-goods orders, which gained 0.4% from December, got a boost from the volatile transportation category, reflecting a 15.9% rise in bookings for civilian aircraft and parts.
Separate data showed Boeing Co.’s aircraft orders fell in January to less than a quarter of the prior month’s total.
A separate Labor Department report on Wednesday showed the producer price index rose less than forecast in February. The PPI increased 0.1% after a 0.1% decline in January. That followed data Tuesday showing consumer-price inflation cooled last month, reinforcing the Federal Reserve’s stance of patience on raising interest rates.
The Commerce Department figures showed January’s three-month annualized trend for shipments of business-equipment increased 1.9% after a 1.6% gain the previous month, while the trend in orders slipped to a 5.3% drop after a 4% decline in the previous month.
Excluding transportation-equipment demand, which is volatile and can move wildly on large orders in any given period, orders dropped 0.1% after a 0.3% increase. Defense capital-goods orders declined 2.3% in January.
The Commerce report’s release, originally scheduled for Feb. 27, was delayed by the longest government shutdown in U.S. history.
By Katia Dmitrieva