Durable-goods orders climb 1.7%

February output tops forecasts, follows solid January gain

Commerce Department data released Friday show a sixth-straight gain in February for orders of long-lasting products like washers and dryers, pictured here at a J.C. Penney Co. store in Pittsburgh in February.
Commerce Department data released Friday show a sixth-straight gain in February for orders of long-lasting products like washers and dryers, pictured here at a J.C. Penney Co. store in Pittsburgh in February.

Orders for U.S. durable goods increased more than forecast in February, a sign companies are confident about the outlook for the economy.

Bookings for goods meant to last at least three years rose 1.7 percent after a 2.3 percent advance the prior month that was larger than previously estimated, Commerce Department data showed Friday. The median forecast of economists surveyed by Bloomberg called for a 1.4 percent increase.

The growth indicates that manufacturers are steadily recovering from a rough patch that began in 2015 when lower energy prices and slower economic growth worldwide cut into demand for U.S. factory goods. The report contained some weakness in a few sectors such as motor vehicles, but it is among several indicators that point to an ongoing rebound.

"Manufacturing surveys appear to promise much stronger numbers, so we're hoping for better news ahead," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

A sixth-straight gain in orders for durable goods minus transportation equipment underscores rising demand that will help to broaden economic growth. Business has the potential of increasing even more should Washington lawmakers succeed in reducing corporate taxes and regulations.

Economists' estimates for durable orders ranged from a drop of 0.7 percent to a gain of 3.5 percent. The prior month's advance was revised from a previously reported 2 percent.

Excluding transportation equipment demand, which is often volatile, orders increased 0.4 percent after a 0.2 percent gain.

The weaker part of the report was in the figure measuring future business investment in computers, engines and communications gear. Bookings of nondefense capital goods excluding aircraft unexpectedly fell 0.1 percent, compared with a median projection for a 0.5 percent advance. January was revised to a 0.1 percent increase.

At the same time, those orders were up at a 9.1 percent annualized rate in the three months ended in February.

Shipments of capital goods excluding aircraft and military hardware, used in calculating gross domestic product, rose 1 percent in February.

The report also showed bookings for civilian aircraft climbed 47.6 percent following an 83.3 percent surge at the start of the year.

Boeing Co., the Chicago-based aerospace company, said it received 43 orders for aircraft in February, up from 26 in the prior month, and deliveries also increased.

The Commerce Department's report showed a 0.8 percent drop in bookings for motor vehicles and parts, as auto dealers deal with high inventory. Industry data showed car sales in February were little changed from the previous month. Cars and light trucks sold at a 17.5 million annualized rate, according to Ward's Automotive Group.

Orders for military capital equipment decreased 8.3 percent, and demand for nondefense durable goods rose 2.1 percent for a second month.

Information for this article was contributed by Jordan Yadoo of Bloomberg News and Josh Boak of The Associated Press.

Business on 03/25/2017

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