MW: Orders for durable goods post second straight gain
WASHINGTON (MarketWatch) — New orders for durable goods, a telltale sign for the U.S. economy, climbed in February for the second straight month.
Orders for durable goods advanced 1.7% while the increase in January was raised several notches to 2.3%, reflecting a pickup in manufacturing that kicked in toward the end of last year.
Economists polled by MarketWatch had forecast a 1.6% increase.
In premarket trades, the Dow Jones Industrial Average DJIA, -0.02% was set to open slightly higher.
The increase in bookings last month was spearheaded by commercial aircraft, whose orders jumped almost 48%. That offset a nearly 1% drop in orders for new cars and trucks.
If transportation is set aside, new orders for manufactured goods rose a smaller 0.4%, the Commerce Department reported Friday.
Still, orders minus transportation have advanced for six straight months.
A key measure of business investment, however, fell slightly, though it was just the first decline in five months. So-called core orders dipped 0.1%.
Business investment is one of three pegs that underpin the U.S. economy, but it’s been underwhelming during the current expansion that began in mid-2009.
Surveys of executives at big and small companies alike suggest investment could pick up even faster soon on the hopes that a pro-business Trump administration fulfills its biggest goals.
Yet it’s too early to tell if Republicans will succeed, especially given their difficulties in replacing Obamacare.
The goods new is, business investment appears to have recovered from a slump that started in 2014 and persisted through the first half of 2016.
Despite a drop in core orders in February, they have risen 2.7% in the past year. That’s the biggest gain in a 12-month period in three and a half years.
Meanwhile, shipments of core capital goods jumped 1% in February. Shipments are fed into the government’s formula for calculating gross domestic product, the official scorecard of the economy. That could give a boost to first-quarter GDP.
