US durable goods orders declined unexpectedly in February and were revised down the previous month, a sign manufacturing activity was still being pressured by a volatile global economy and weak energy prices.
Orders for manufactured goods meant to last three years or more tumbled 1.4 percent in February, following a downwardly revised gain of 2 percent in January that was originally reported as 2.8 percent, the Commerce Department reported on Wednesday. Economists forecast an increase of 0.4 percent.
January had been the first time durable goods orders had increased in three months. Energy producers are scaling back production to account for the near-halving of global crude prices since last June.
A fall in transportation equipment orders led the decline last month, falling 3.5 percent. Excluding transportation equipment, durable goods orders fell 0.4 percent after declining 0.7 percent the prior month.
New orders for non-military capital goods excluding aircraft – a gauge of business spending – declined 1.4 percent in February, a sixth consecutive monthly drop. Orders in this category were forecast to rise 0.3 percent.
Spending on business equipment climbed 0.9 percent in the fourth quarter, the weakest since Q1 of 2014. The Commerce Department will post a third and final estimate of fourth quarter growth on Friday.
Shipments of non-military capital goods excluding aircraft, which is used in the calculation of gross domestic product, increased 0.2 percent in February after a revised 0.4 percent drop the previous month.
Last week the Federal Reserve Board said industrial production – a broader gauge of factory output that includes manufacturing, mining and utilities – rose just 0.1 percent in February. The manufacturing component, which accounts for three-quarters of industrial production and 12 percent of US GDP, dropped for a third consecutive month.
A separate gauge of US manufacturing activity released on Tuesday suggested factory activity was rebounding in March. The Markit flash US manufacturing PMI climbed to a five-month high this month, reaching 55.3. Manufacturing output rose at the fastest pace September, while new orders increased at the strongest rate in five months, despite a drop in export sales.