Orders for long-term goods jumped 5.7% in February erasing the revised 3.8% drop in January but the details of the report indicate weakness in business and consumer purchases. Economists had predicted 3.9% gain in February. The initial January release was -5.2%
Excluding placements in the transportation sector, the 'durables ex-transport' number was -0.5% in February well under the 0.6% prediction and January's upwardly revised 2.9% reading, initially reported at 1.9%.
Orders for long-term business goods, also called 'capital goods orders, non-defense, ex-aircraft', a commonly used economic proxy for business investment fell 2.7% in February more than double the -1.1% forecast and far from the January positive revision at 6.7%, originally 6.3%.
The seeming boom in overall good orders was led by demand for transportation equipment which surged 21.7% in February as orders for civilian aircraft soared 95.3%. Boeing Company of Chicago recorded 143 new orders in February compared to only 2 in January. Automobile orders grew 3.8%.
Over the last twelve months durable goods order are up 1.2% an improvement from the flat readings in January and December. Over the past five years durable goods orders have averaged a 1.0% yearly gain each month. In 2010 that gain averaged 27.2% as consumers returned to stores after purchases plummeted more than 40% from June 2008 to February 2009.
Chief Market Strategist