Durable goods orders rise unexpectedly

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Orders for durable goods unexpectedly increased 3.4 percent to $165.6 billion in February, the largest gain in more than a year and the first in more than seven months, Bloomberg reported.

Last month’s rise comes after a weak January performance, when durable goods orders fell 7.3 percent.

“It’s not going to be downhill forever,” said Stephen Gallagher, chief U.S. economist at Societe Generale in New York, who had forecast no change in durable goods orders. “Once businesses achieve a reduction in their inventories, they will pick up their new orders and production.”

According to a Bloomberg News survey, economists had predicted that total durable goods orders would decrease 2.5 percent, and when excluding transportation equipment, new orders were expected to decline 2 percent.

However, new orders excluding transportation in February were up 3.9 percent, the biggest improvement since August 2005.

“I’m feeling better about that with this type of news,” Gallagher said. “After some horrific data, we’re seeing some stability.”

Additionally, non-defense capital goods orders excluding aircraft, which is a closely watched proxy for business spending, increased 6.6 percent in February after falling 11.3 percent in January.