Durable goods data showed the US manufacturing recession continued in February, which the coronavirus outbreak will only make worse
Washington (AFP) - Demand for airplanes and cars pushed February US durable goods orders higher than expected, according to government data Wednesday that was compiled before the coronavirus outbreak hit the economy.
But manufacturing outside of transportation decreased more than analysts forecast, showing the continued challenges faced by US heavy industry amid the ongoing manufacturing recession that the pandemic will only make worse.
New orders for durables goods increased 1.2 percent in February to $249.4 billion, the Census Bureau reported, rocketing up from January, which was revised up to show an increase of 0.1 percent after initially posting a slight decline.
The jump in transportation orders of 4.6 percent to $87 billion fueled the overall increase. New orders for motor vehicles and parts rose 1.8 percent in the month.
But excluding transportation, manufacturing showed its continuing weakness, with orders decreasing by 0.6 percent.
New orders for non-defense aircraft and parts slipped 0.3 percent as Boeing struggled with tepid sales amid the grounding of its 737 MAX jet. But shipments in the month surged 17.5 percent.
“The tentative stabilization in durable goods orders is over, and sharp pain awaits manufacturers,” Gregory Daco of Oxford Economics said, pointing to the slump in the “core” capital goods orders, which excludes transportation.
As with all economic data compiled before the coronavirus battered the American economy, damage expected to send it into recession, the trends in this report likely will be upended in next month’s data.
“The intertwined supply and demand shocks triggered by the coronavirus is dealing a severe blow to business activity amid an economic sudden-stop, broken supply chains, tighter financial conditions and suppressed demand,” Daco said, predicting “one of the largest pullback in capital spending of all times.”