The Atlanta Journal-Constitution
Manufacturing rebound eases a bit
Orders for U.S. durable goods unexpectedly declined in February for the first time since April, indicating a pause in the monthslong manufacturing rebound. Bookings for items meant to last at least three years decreased 1.1% from the prior month after an upwardly revised 3.5% gain in January, Commerce Department figures showed Wednesday.
The situation
Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business investment, dropped 0.8% after an upwardly revised 0.6% gain. The median estimates in a Bloomberg survey of economists called for 0.5% increases in both total durables orders and core capital goods bookings.
What it means
The figures likely represent a temporary softening in the rebound seen across the nation’s factories since the pandemic upended production and demand last year. Production is still being restrained by shortages of some raw materials and supply chain disruptions.
“In all likelihood, the February results were suppressed by unusually harsh weather that substantially disrupted economic activity in much of the South and Midwest,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez, said in a note.
0.8%
February increase in unfilled orders for durable goods, the most since September 2018 (indicating a tailwind for manufacturing from a gradual pickup in economic activity)
-0.9%
Decline in durable goods orders excluding transportation
-8.7%
Decline in orders for motor vehicles and parts (shipments decreased 8.9% amid severe weather and the shortage)
12.7%
Annualized increase in core capital goods in the three months through February (shipments rose 13.4%)
$254 billion
Value of durable goods orders (above a year earlier)
0.7%
Increase in inventories over the previous month
SOURCE: U.S. Department of Commerce