U.S. Durable Goods Orders – February 2014
The headline-beating 2.2% jump in orders for new durable goods in February was driven by a rebound in the transport sector.
Stripping out that volatile component saw orders rise by a more humble 0.2%. Relative to expectations the report showed pockets of strength, but failed overall to signal the final passage of a cruel winter. Capital goods orders, which are seen as a proxy for business demand, fell by 1.5% in the month indicating the recovery may take longer to quicken.
Transportation orders jumped by 6.9% boosted by a 3.6% increase in orders for vehicles and parts. Orders for primary metals snapped back from an earlier loss, rising by 1.8% while orders for fabricated metals used for construction increased for a second month. So too did orders for computers and electronics equipment. Durable shipments rose by 0.9% and rebounded from a two-month string of declines. That number is used to calculate GDP, but again was softer than was hoped. In addition several pieces of the prior report were massaged lower.
In summary, the report offers rays of sunlight, but at this stage they are unlikely to set the world alight. Still, unlikely to unsettle the earlier in the day rebound for equity prices.
Chart – Transport orders rebounded with vigor