Orders for US-made durable goods rose more than expected in February, while business investment in equipment was seen to pick up in the first quarter.
Orders for durable goods, items ranging from toasters to aircraft intended to last three years or more, rose 1.4% last month on a rise in orders for transportation equipment and machinery, according to the U.S. Commerce Department's Census Bureau on Tuesday.
Data for January was revised down to show orders falling by 6.9% compared to 6.2% as previously reported. Economists cited by Reuters had forecast durable goods orders to rise 1.1%.
Manufactured goods are still constrained by higher interest rates, which have limited demand for goods. Waima so the outlook for the sector, which contributes 10.3% to the economy, is rising following expectations that the Federal Reserve will start to cut interest rates this year.
A survey from the Institute of Supply Management this month showed manufacturers were somewhat optimistic in March about sales and business conditions. Factory output rose again in February.
The US central bank has raised the key rate by 525 basis points to the current range of 5.25%-5.50% since March 2022.
Capital goods orders excluding excluded defense items such as aircraft, a closely watched indicator of business spending plans, rose 0.7% in February after falling 0.4% in the previous month.
These core capital goods orders were previously reported unchanged in January. Shipments of core capital goods fell 0.4% after rising 0.8% in January.
Non-defense capital goods orders rose 4.4%, while shipments rose 2.7% after falling 3.0% in January. The delivery of these goods is included in the calculation of the business expenditure component of the gross domestic product report.
Business spending plans on equipment plummeted in the fourth quarter. It has fallen in the last four quarters out of five quarters.
