US core capital goods orders fall in February

[WASHINGTON] New orders for US-made capital goods unexpectedly fell in February while shipments slowed, but demand for goods remains strong - which should keep manufacturing expanding.

Orders for non-defence capital goods excluding aircraft, a closely watched proxy for business spending plans, slipped 0.3 per cent last month, the Commerce Department said on Thursday (Mar 24). These so-called core capital goods orders jumped 1.3 per cent in January.

Economists polled by Reuters had forecast core capital goods orders rising 0.5 per cent.

Shipments of core capital goods gained 0.5 per cent last month after increasing 2.1 per cent in January. Core capital goods shipments are used to calculate equipment spending in the gross domestic product measurement.

Demand for goods remains strong even as spending is shifting back to services, keeping manufacturing growing. But the sector, which accounts for 11.9 per cent of the economy, continues to battle supply bottlenecks.

Though supply chains have been improving, that progress could be set back by Russia's war against Ukraine, which has sent commodity prices, including oil, soaring. Factories are sitting on piles of unfinished work.

Orders for durable goods, items ranging from toasters to aircraft that are meant to last 3 years or more, fell 2.2 per cent after increasing 1.6 per cent in January. They were pulled down by a 5.6 per cent decline in orders for transportation equipment, which followed a 3.2 per cent increased in January.

Motor vehicle orders fell 0.5 per cent after decreasing 0.7 per cent in January. Orders for the volatile civilian aircraft category tumbled 30.4 per cent after increasing 10.9 per cent in January. Boeing reported on its website that it had received only 37 aircraft orders last month compared to 77 in January. REUTERS