US durable goods show recovery is on track
New orders for US durable goods rose faster than forecast in February, ending two consecutive months of declines and providing hope the US economy was emerging from its winter freeze.
Orders for manufactured goods meant to last three years or more rose 2.2 percent in February, after falling 1.3 percent the previous month, the Commerce Department reported today in Washington. A median estimate of economists in a Reuters poll called for a 1 percent hike.
Core durables excluding transportation unexpectedly rose 0.2 percent last month, after rising of 0.9 percent in January. Economists said core durables would rise 0.3 percent.
Shipments of durable goods rose 0.9 percent in February, following two consecutive months of declines. Unfilled orders, up 12 of the last 13 months, increased 0.3 percent. Non-defense capital goods orders excluding aircraft unexpectedly fell 1.3 percent, following a gain of 0.8 percent in January, official data showed.
The report is the latest in a series of official data showing the US economy rebounded after an unusually cold winter. Retail sales, industrial output and employment all rose in February. However, GDP growth in the first quarter is expected to have slowed from the fourth quarter’s annualized rate of 2.4 percent. The Commerce Department will publish revised GDP figures Thursday.
The sharper than forecast rebound in February validates the Federal Reserve’s latest decision to continue reducing the pace of bond purchases. Undeterred by the weather-induced slowdown, the Fed cut bond purchases by $10 billion at it March policy meetings, and for the first time offered a tentative timetable for a rate hike.
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