Aircraft sales lift US durable goods in February
A rebound in sales of defense and civilian aircraft boosted February sales of US-manufactured goods to their biggest gain in eight months, the Commerce Department reported Friday.
The data was a welcome sign for economic growth in the first quarter, with the gain more than double analyst expectations. The sluggish auto sector also saw a healthy bump.
With broad-based gains across multiple industrial sectors, total orders for durable goods rose 3.1 percent to $247.7 billion, rising the most since June.
The result handily overshot a consensus forecast among economists, who were expecting an increase of only 1.5 percent.
The bounce also offset most of January's 3.5 percent decline and put the first two months of 2018 a solid 9.1 percent above the same period last year.
However, RDQ Economics said the strong manufacturing sector is sensitive to the looming threat of a trade war, amid heated confrontation between the United States and China.
Uncertainty "hurts capital spending and the greatest uncertainty in the economic environment at present is the wildcard threat that US tariff actions poses to the global trading system," RDQ said in a research note.
Orders for civilian aircraft rose 25.5 percent, reversing January's decline in the volatile sector, while military aircraft sales added 37.7 percent, recouping much of the 48.9 percent drop in the prior month.
But excluding the highly volatile transportation sector, which sees broad swings from month to month, the report still showed 1.2 percent increase.
Sales of cars and trucks, long in the doldrums, rose by 1.6 percent after being essentially flat in the prior two months.
Orders for electrical equipment and appliances had their best month since July 2016, adding 2.6 percent, while non-defense capital goods, a segment that can track investment by the oil drilling industry, added 1.8 percent.
Economist Mickey Levy of Berenberg Capital markets highlighted this "core" data point "which has increased for 13 consecutive months, the longest streak in the 26-year history of the series."
The outsized increase "suggests that underlying manufacturing demand is strong and factory activity is poised to remain elevated in coming months," he said.
The lone sour note was communications equipment, which fell 8.4 percent, the biggest monthly decline since December 2015.
© 2018 AFP