American workers at a manufacturing plant for long-lasting durable goods. (PHOTO: REUTERS)
The Commerce Department reported on Thursday durable goods orders fell 2.8% in February from the prior month, missing the median forecast for a 2.8% decrease. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.8% after gaining by a downwardly revised 3.1% in January.
The drop in durable goods orders in February was fueled by a whopping 27.1% decrease in civilian aircraft orders, which sparked a 6.2% decline in bookings for transportation equipment.
These so-called core capital goods orders were previously reported to have increased 3.4% in January. Excluding the volatile transportation component and durable goods orders fell by a shallower 1%, missing estimates for a decline by 0.2%.
Durable goods are defined as manufactured products ranging from washing machines to dryers to toasters to aircraft, which are meant to last three years or more. The manufacturing sector, which accounts for 12% of the U.S. economy, has been floundering even as other sectors, largely the service sector, carry the economy.
The decline in shipments last month could prompt economists to slice off first-quarter GDP growth estimates, which are currently around a 2% annualized rate. The economy grew at a 1.0% rate in the fourth quarter.
