Shipments and orders of manufactured durable goods, increased in February according to numbers released today from the U.S. Commerce Department, while home sales slid and consumer confidence fell in March.
Shipments continued a close to non-interrupted streak of increases the past six months. They moved 1% higher in February from the month before, following a 0.7% January decrease. Shipments of transportation equipment increased the most in February, adding 1.6%, following a January drop of 1.9%. It has moved higher the past three out of four months. Excluding defense orders there was a 4.5% increase.
New orders for manufactured durable goods skyrocketed in February from January, picking up 5.7%, following a 3.8% decrease in January. The fifth gain in the last six months and the best performance since September. Much of this hike was due to a surge in new transportation orders, increasing 21.7%. Excluding them February turned in a 0.5% decrease. Excluding defense orders there was a 4.5% increase in new orders.
Durable goods are defined as items designed to last three years or more.
In a separate report the Commerce Department reported sales of new single-family homes in February fell 4.6% in February, following a 13.1% jump in January. Despite the decline, this put the annual rate for February at 411,000 units while January’s level was revised down to 431,000, the latter being the highest level since September 2008. Compared to the same time in 2012, February sales were 12.3% higher.
Some analysts warn that builders could struggle to keep up with demand for new homes and that could cause uneven sales levels the next few months rather than a reflection of buyers being less interested in new homes.
Meantime, U.S. consumers showed they remain fickle as ever, with the private group the Conference Board releasing a report that U.S. consumer confidence in the economy fell sharply in March.
“This month’s retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “The recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident.”
This report is the opposite of what group released last week when it comes its monthly index of leading economic indicators, which is used to gauge U.S. economic activity three to six months down the road. It increased 0.5% in February, following a 0.5% gain in January and 0.4% upturn in December.
“The U.S. economy is growing slowly now, and with this reading increases hope that it may pick up some momentum in the second half of the year,” said Ken Goldstein, economist at The Conference Board. “However, this latest report does not yet capture the recent effects of sequestration, which could dampen the pickup in GDP.”