New orders for manufactured durable goods in February increased $5.5 billion or 3.4% to $165.6 billion, the U.S. Census Bureau announced on March 25. This increase follows six consecutive monthly decreases, including a 7.3% January decrease.
Excluding transportation, new orders increased 3.9%. Excluding defense, new orders increased 1.7%.
"The February report on durable goods demand is the latest in a recent series of data releases which suggest that the recession-battered U.S. economy may be close to, or at, a business cycle bottom," said Cliff Waldman, Economist for the Manufacturers Alliance/MAPI. "Total new orders, as well as new orders excluding the volatile transportation and defense categories, all registered healthy gains supported by positive activity in key primary input and capital goods industries such as fabricated metals and machinery. And non-defense capital goods demand excluding aircraft, a proxy for business equipment spending, registered a strong gain of nearly 7%.
"The welcome turn in big ticket demand, however, must be interpreted with caution, he added. "The modest signs of stability in the U.S. economy are early and could be attributed to one-time factors. And the global picture is still unequivocally dark with dramatic economic and manufacturing declines in the Eurozone and Japan, and a worse-than-expected economic slowdown in large emerging market nations including Brazil, India, and China.
Hopefully, the broad policy programs in the U.S. aimed at restoring normal functioning to credit markets and supporting economic activity, as well as stimulus programs in other major regions, will bring a measure of health to the global economy and thus to manufacturing activity later this year. But, at the moment, there is still a long way to go and considerable downside risk for the U.S. factory sector."