Orders for Durable Goods Jump

WASHINGTON — Demand for long-lasting manufactured goods surged 5.7 percent in February as orders for transportation equipment rebounded strongly, the Commerce Department said Tuesday.

The rise in durable goods orders, which range from toasters to aircraft, reversed January’s 3.8 percent plunge and suggested factory activity continued to expand at a moderate pace. Economists polled by Reuters had expected orders to rise 3.8 percent after a previously reported 4.9 percent fall in January.

Excluding transportation, orders slipped 0.5 percent after increasing 2.9 percent in January.

But the government also said nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 2.7 percent, the largest decline since July; economists had expected a 1.2 percent drop. Orders for the so-called core capital goods had jumped 6.7 percent in January.

However, core capital goods shipments, used to calculate equipment and software spending in the gross domestic product report, increased 1.9 percent. That followed a 0.7 percent fall in January and suggested that business spending would again contribute to growth this quarter.

Though the report was mixed, it was in line with other data, including industrial production and the Institute for Supply Management’s survey of national factory activity, that have shown a steady growth pace in manufacturing.

Overall orders for durable goods were buoyed by a 21.7 percent jump transportation equipment as demand for civilian aircraft surged 95.3 percent. Motor vehicle orders increased 3.8 percent. Defense aircraft orders rose 7.6 percent.

In a separate report, a closely watched survey showed that single-family home prices rose slightly in January.

The Standard Poor’s Case Shiller composite index of 20 metropolitan areas gained 0.1 percent from December. On a seasonally adjusted basis, the rise was 1 percent, topping expectations for 0.9 percent. Prices have been gaining since February 2012.

Prices in the 20 cities climbed 8.1 percent from January 2012, unadjusted. It was the biggest yearly increase since June 2006.

Another report said consumer confidence tumbled in March as Americans turned more pessimistic about economic prospects in the short term.

The Conference Board, an industry group, said its index of consumer attitudes fell to 59.7 from a downwardly revised 68 in February. The figure fell short of economists’ expectations of 68. February was originally reported as 69.6.

Those expecting business conditions to get better over the next six months decreased to 14.4 percent from 18 percent, and those expecting conditions to get worse rose to 18.3 percent from 16.6 percent.

“The recent sequester has created uncertainty regarding the economic outlook and, as a result, consumers are less confident,” Lynn Franco, director of economic indicators at The Conference Board, said in a statement.

The $85 billion in automatic government spending cuts known as the sequester was triggered at the beginning of the month when politicians failed to come to an agreement on a new deal.

Article source: http://www.nytimes.com/2013/03/27/business/economy/orders-for-durable-goods-jump.html?partner=rss&emc=rss