February Durable Goods Orders Tumble

Orders for costly U.S. manufactured goods continued to slide in February as demand for aircraft and other big-ticket items idled at the start of the year, the government said Friday.

But even though orders for durable goods such as cars, computers and appliances intended to last three years or more fell by 2.3% to a seasonally adjusted $208.45 billion, economists said the manufacturing sector’s recovery from the global financial crisis of 1997-99 was still firmly on track.

February’s report by the Commerce Department was far weaker than analysts’ forecast of a 0.2% decline and followed a drop of 2.2% in January, which was revised from a previous estimate of 1.9%.

The February fall was the sharpest decline since April of last year.

Compared with February 1999, however, orders were still up a solid 7.3%. And in December overall orders rose by 6.5%. Monthly durable orders data are notoriously volatile and often undergo sharp revisions.

Analysts said there was little in the report to suggest that a slowdown in the booming U.S. economy is imminent.

“All of this is coming after a pretty lengthy period of strength,” said Jay Feldman, an economist at Credit Suisse First Boston in New York. “The rest of the economy is running red hot.”

Orders for transportation equipment fell a hefty 8.7% to $47.1 billion, led by a decline in aircraft and parts orders. The drop came on top of a 7.2% decrease in January.

Industrial machinery and equipment--a category that includes computers--was down by 4.6% at $40.6 billion.

Orders for electronic and other electrical equipment, however, rose by 6.4% to $39.7 billion in February, partly recovering from a 10% plunge the previous month.

Shipments of finished products fell by 1.8% to $205.7 billion, led by a decline in motor vehicles and parts. The drop more than outweighed a 1.5% increase in January.