Orders for durable goods rise 2.2%
U.S. companies ordered more long-lasting goods last month, signaling businesses are willing to buy equipment and machinery even after an investment tax credit was halved. The Commerce Department reports this morning that orders for durable goods rose 2.2% in February after a steep drop in January. Greater demand for machinery, computers, autos and aircraft drove much of the increase. Orders for so-called core capital goods, a good measure of business investment plans, rose 1.2%. Demand for these goods fell in January by the most in a year, after the full tax credit expired. Durable goods are described as those expected to last at least three years. Orders can fluctuate sharply from month to month. Still, orders have been steadily rising since the recession ended nearly three years ago. In February, durable goods orders totaled $211.8 billion, 42% above the recession low. Orders remain roughly 14% below their peak in December 2007. The increase in February disappointed some economists, who had hoped to see a bigger gain in orders. Paul Ashworth, an economist at Capital Economics, notes that orders for commercial aircraft were much smaller than expected. "Otherwise, the orders data were encouraging," Ashworth wrote in a note to clients. Excluding airplanes and other transportation equipment, orders rose at a 1.6% pace, close to economists' forecasts.
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