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Durable goods orders rebound strongly in February on aircraft demand

Durable goods orders rebound strongly in February on aircraft demand
Noe Castaneda assembles child car seats at the Dorel Juvenile Group factory in Columbus, Ind. (Luke Sharrett / Bloomberg)

WASHINGTON -- Demand for cars, aircraft and other durable goods surged last month, a stronger-than-expected rebound after two months of decreases, the Commerce Department said Wednesday.

New orders jumped 2.2% in February after declining by 1.3% the previous month and a deep 5.3% in December.

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Last month's increase was the best since November. Economists had expected an improvement in February, but forecast only a 1% rise.

Still, aside from a surge in demand for aircraft, the report was not as strong as the top-line numbers indicated.

Orders placed for durable goods, products meant to last at least three years, are an important indicator of future economic activity in the vital manufacturing sector.

A large rise in orders for transportation equipment helped fuel last month's increase.

After declining for two months, transportation orders jumped 6.9% in February. Orders for nondefense aircraft and parts increased 13.6% after a 22.1% decline the previous month.

The sector was helped by Boeing Corp., which reported 74 new aircraft orders last month after just 38 in January.

Motor vehicle orders also increased by 3.6% after a 1.9% drop the previous month.

Excluding the often-volatile transportation data, new orders were up just 0.2% last month, down from a 0.9% increase in January and slightly below analyst expectations.

In a worrisome sign, a key category that indicates business investment declined. Orders for nondefense capital goods, excluding aircraft, fell 1.3% after a 0.8% increase in January.

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