US durable goods drop less than expected
Print Edition
NEW orders for long-lasting US manufactured goods fell in February as the sector continues to struggle with the lingering effects of a robust dollar and lower oil prices.
While other data yesterday showed an increase in the number of Americans filing for unemployment benefits last week, revisions to the prior weeks’ figures showed the labor market was much stronger than previously thought.
The labor market resilience underscores the economy’s strength, which has helped calm concerns of a looming recession. That could see the Federal Reserve gradually raise interest rates this year.
The Commerce Department said orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, declined 2.8 percent last month after a downwardly revised 4.2 percent increase in January.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, shed 1.8 percent after advancing by a downwardly revised 3.1 percent in January. These so-called core capital goods orders were previously reported to have added 3.4 percent in January.
Economists polled by Reuters had forecast durable goods orders falling 2.9 percent last month and orders for core capital goods slipping 0.1 percent.
In a separate report, the Labor Department said initial claims for state jobless benefits rose 6,000 to a seasonally adjusted 265,000 for the week ended March 19.
The government also revised data going back to 2011, which showed claims trending lower than previously reported. Claims for the week ended March 5 were the lowest since November 1973.
Last month’s drop in durable goods orders bucks recent data that have suggested the downward spiral in manufacturing was close to an end. Several reports in recent days have shown a pickup in regional factory activity in March, leading to optimism that a broader manufacturing survey will show the sector expanded this month for the first time since September.
Manufacturing, which takes up 12 percent of the US economy, has been hit by the strong dollar, weak global demand and capital spending cuts by oilfield service firms like Schlumberger and Halliburton.
Efforts by businesses to sell unwanted inventory have also meant fewer orders placed, adding to pressure on factories.
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