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US durable goods orders drop 1.1% in February: govt

·2-min read
Boeing booked more new orders than cancelations in February for the first time in over a year, but that wasn't enough to pull transportation manufacturing out of a wider slump, US government data said

US durable goods orders fell 1.1 percent last month, government data said on Wednesday, the first month-on-month slump since the worst of the pandemic's business disruptions in April 2020.

The worse-than-expected result was caused by a decline in transportation orders, and ended a streak of nine consecutive monthly increases in the manufactured goods sector, the Commerce Department said.

Analysts blamed bad winter weather for the decline to $254.0 billion in orders, with many sectors seeing decreases last month after January's upwardly revised overall growth of 3.5 percent.

Transportation saw its first monthly decline in five months, falling 1.6 percent to $83.6 billion, even as Boeing posted a surge in new orders that kept it from a worse result.

Excluding transportation, orders fell 0.9 percent, the data said, and excluding defense, they fell 0.7 percent, indicating the turmoil winter storms caused for factories last month.

"The February data are signaling ongoing but slower growth in both business and equipment spending" in the first quarter, Rubeela Farooqi of High Frequency Economics said. "The manufacturing sector continues to recover, still supported for now by demand for goods since the pandemic and lean inventories."

Motor vehicles and parts saw orders decline 8.7 percent, while defense aircraft and parts slumped 3.7 percent.

However nondefense aircraft and parts surged 103.3 percent as Boeing booked more new orders than cancelations last month for the first time since November 2019.

The storms hit a variety of other sectors, including machinery, which fell 0.6 percent. Computers and related products declined 1.9 percent amid a global semiconductor shortage.

Ian Shepherdson of Pantheon Macroeconomics characterized the data as a stumble in the sector's recovery that does not signal a sustained slowdown.

"We feared an even bigger fall in orders, but the damage was limited by a bigger increase in civilian aircraft orders than appeared to be implied by data from Boeing," he said.

"The pre-storm trend in orders was rising at a rapid and steady pace, and manufacturing surveys remain very strong," Shepherdson added, predicting a return to growth in March.