The Journal Gazette
Thursday, March 26, 2020 1:00 am

February good for durable goods

MARTIN CRUTSINGER | Associated Press

WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods rose by a solid amount in February, but the gain came before the coronavirus pandemic had shut down much of the country.

The Commerce Department said Wednesday durable goods orders rose 1.2% last month, rebounding from January when orders had shown a tiny 0.1% gain.

However, with all the shutdowns that have occurred as authorities try to deal with the coronavirus, economists are looking for weak reports in coming months.

The durable goods report showed that the 1.2% February gain, which pushed total orders to a seasonally adjusted $249.4 billion, was the best performance since a 2.8% advance in December.

A key category that serves as a proxy for businesses plans on investment fell by 0.8% in February after a 1% rise in January. This category, which has been weak during the last year, had fallen 0.8% in December.

Many analysts believe the virus has already pushed the country into a recession with the most pessimistic forecasting that the overall economy, as measured by the gross domestic product, could plunge by 20% or more in the April-to-June quarter.

Analysts said they expected a sharp deterioration in orders to show up in the March report.

“Businesses were not canceling orders yet to any significant degree, but that's going to change in March as the coronavirus will take a toll on factory production in many states which have shelter-in-place rules” said Chris Rupkey, chief financial economist at MUFG in New York.

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