New orders to American factories rose strongly in February more than reversing January's decline but the gain was fueled by the volatile transport sector and an important measure of business investment declined more than originally estimated.
Placements for U.S manufactured goods increased 3.0%, slightly ahead of the 2.9% forecast, according to the Commerce Department in Washington, D.C. today. The January decline was halved by revision to -1.0% from -2.0%.
Factory Orders received a healthy 5.6% boost from previously reported durable goods orders, items designed to last more than three years, which comprise about half of U.S. manufactured output. Non-military aircraft orders jumped 95.1% in February led by Boeing's 179 orders, up from two in January. Automobiles are having their best sales year so far since 2007. Orders for non-durable goods rose 0.8% on the month with some of the increase in this non-inflation indexed statistics reflecting hikes in commodity prices.
Without the transportation sector, primarily civilian aircraft and automobiles, the gain in factory orders was a much more modest 0.3%.
Business investment, the non-defense capital goods excluding aircraft category in this report and in the durable goods report released last week, fell 3.2% in February, worse than the -2.7% figure initially reported. It had surged 6.7% in January.
Overall manufacturing is about 12% of the U.S. economy, the balance being services.
Chief market Strategist