Durable goods orders fell 1.4 percent in February, while January’s read on new orders was revised sharply lower to 2.0 percent. Excluding the volatile transportation orders, new orders fell 0.4 percent for the month.
Transportation Orders Decline for the Month
- Transportation orders declined 3.5 percent in February after a strong 8.8 percent increase in January. Other areas of softness in the report were fabricated metals and machinery orders.
- Core capital goods orders posted a 1.4 percent decline in February. The weakness in new orders continues to support the case for more moderate business investment beyond the first quarter of this year.
Core Capital Goods Shipments Concerning in Q1
- Shipments of core capital goods, a measure that typically provides some indication about equipment investment within GDP, posted a 0.2 percent rise for the month, which supports the case for modest business investment in the first quarter.
- Inventories of durable goods rose 0.3 percent in each of the past two months, supporting our case for a slower pace of inventory building and a drag to Q1 growth from inventories.
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