WASHINGTON (Reuters) - New orders for long-lasting U.S. factory goods posted only a moderate increase in February, supporting the view that economic growth in the first quarter was shaping up to be lackluster.
Durable goods orders increased 2.2 percent last month, missing economists’ forecasts and only partially reversing January’s revised 3.6 percent decline, Commerce Department data showed on Wednesday.
A gauge of future business investment also fell short of forecasts.
“The economy is slowly improving, but it is definitely a halting recovery where we’re not accelerating to any great degree,” said Liam Dalton, president of Axiom Capital Management Inc in New York.
Manufacturing has been a key support for the U.S. recovery from the 2007-2009 recession, and a recent acceleration in job growth has boosted hopes the extra income will create a virtuous cycle that leads to more spending.
Still, many economists are skeptical hiring will accelerate in coming months and Federal Reserve Chairman Ben Bernanke said on Tuesday it was too soon to declare victory in the recovery. Regarding the possibility of further monetary stimulus to spur stronger growth, he said the bank was not taking any options off the table.
Wednesday’s data suggested the factory sector might not be growing as fast as analysts had expected, and U.S. stocks were lower. U.S. government debt prices were little changed.
Economists expected orders for durable goods, which are items from toasters to aircraft that are meant to last three years or more, to rise 3.0 percent.
Capital Economics economist Paul Ashworth said February’s reading reinforced expectations total economic output growth would slow during the first quarter to around a 2 percent annual rate. That pace would generally be seen as too weak to bring down the 8.3 percent unemployment rate.
In the fourth quarter, company efforts to restock shelves helped gross domestic product expand at a 3.0 percent annual rate. As the impetus from restocking fades, factory output will slip absent a pick-up in orders.
Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, rose 1.4 percent in February.
Excluding transportation, orders climbed 1.6 percent. Machinery orders increased 5.7 percent.
Orders for non-defense capital goods excluding aircraft, a closely watched proxy for future business investment, edged 1.2 percent higher, missing analysts’ expectations of a 2.0 percent gain. They fell 3.7 percent in January.
A 3.9 percent increase in bookings for transportation equipment in February - including a 6.0 percent jump in civilian aircraft orders - helped drive overall orders higher.
Boeing received 237 orders for aircraft during the month, according to the plane maker’s website, up from 150 in January.
Orders for motor vehicles edged up 1.6 percent.
In a separate report, the Mortgage Bankers Association said its gauge of loan requests for home purchases rose 3.3 percent in the week ended March 23, the latest sign of rekindling activity in the housing market.
Additional reporting by Ryan Vlastelica in New York; Editing by Andrea Ricci