Durables orders rebounded in the latest month but disappointed in magnitude though the excluding transportation component was as expected. In February, new factory orders for durables rebounded 2.2 percent, following a revised 3.6 percent drop in January (prior revised estimate, down 3.7 percent) and 3.3 percent jump in December. The market consensus called for a 2.9 percent gain.
Excluding transportation, durables made a 1.6 percent comeback after a revised 3.0 percent decline in January (prior revised estimate, down 3.2 percent), and a 2.3 percent advance in December. February's boost came in marginally higher than analysts' projection for a 1.5 percent rise.
The very volatile transportation rebounded 3.9 percent in February after dropping 5.3 percent the month before. Subcomponent strength was led by defense aircraft with increases also seen in nondefense aircraft and motor vehicles.
Outside of transportation, gains were widespread. Improvement was seen in primary metals, up 1.3 percent; fabricated metals, up 1.3 percent; machinery, up 5.7 percent; and computers & electronics, up 2.7 percent. Losing ground were electrical equipment, down 2.5 percent and "other," down 0.6 percent.
Business investment in equipment has been choppy as new orders for nondefense capital goods excluding aircraft rebounded 1.2 percent in February after dropping 3.7 percent in January and rising 3.5 percent in December. Shipments for this series gained 1.4 percent in February, following a 3.0 percent dip in January and a 2.8 percent advance in December.
On a monthly basis, the volatility in transportation is not a big deal. Although the ex-transportation component rebounded and met expectations, the overall trajectory of manufacturing is not as strong as hoped but is still providing forward momentum for the economy.
On the news, equity futures eased slightly while Treasury rates were little changed.
Durable goods orders in January fell back a revised 3.7 percent, following a revised 3.3 percent jump in December. Excluding transportation, durables fell a revised 3.0 percent after a 2.3 percent advance in December. By components, weakness was led by transportation but other components were mostly down.