Another rise in new orders for US durables, home sales plunged

03-25-2010 09:06

For the third consecutive month, new orders for American durables increased in February due to companies rebuilding stocks by the biggest margin in more than twelve months, which indicates that manufacturing continues to strengthen. However, sales of news homes demonstrated a strong decline in February.

Orders for durable goods

The United States Department of Commerce stated that orders for durable goods increased by 0.5% in February, while January’s numbers were adjusted upward to demonstrate a 3.9% rise. Analysts had forecasted a 0.7% increase in February, in comparison to the earlier reported 2.6% increase. Manufacturing is one of the main drivers of the economic revival in the US, after the most intense slump in seventy years, as companies replenish stocks, which had declined to unprecedented levels after demand dropped sharply.

US durable goods

Stocks of long-lasting manufactured goods increased by 0.3%, which is the largest rise since late 2008, following a 0.1% increase in January. Strong aircraft bookings possibly contributed to the rise in orders, and compensate another decrease in orders for motor vehicles and parts.

Manufacturing activity

Furthermore, February showed a 32.7% increase in non-defense aircraft orders, following a 134.9% rise in January. Car orders dropped by 1.9%, while they plunged 2.3% in January. Orders for long-lasting manufactured goods are a closely watched proxy of manufacturing activity, and it’s also a major indicator of business health in general.

Durables

New orders for durables, not including transportation, gained 0.9% last month, as they dropped 0.6% in January. Markets had forecasted that new orders without transportation would gain 0.6%. Without defense, orders rose 1.6%, following a 1.7% jump in the previous month. Non-defense capital goods orders, not including aircraft, a leading indicator for business spending, rose 1.1% in February, while they dropped by 3.9% in the previous month. Nevertheless, markets had expected a 2.3% increase.

Shipments

Shipments dropped by 0.6% last month, following a 0.1% decline in the previous month. Unfilled orders gained 0.4%, which is the biggest increase since mid 2008, while January showed a 0.2% rise.

Sales of new homes

Sales of new homes in the wealthiest nation in the world dropped to an all-time low last month, emphasizing the weak condition of a sector that caused the financial slump. The United States Department of Commerce reported that sales of new single-family houses showed a seasonally corrected yearly rate of 308.000 houses, which is 2.2% under the adjusted rate of 315.000 in the previous month. It was the second straight month that the gauge has showed record lows.