New orders for long-lasting US factory goods rose more than expected in February as demand for aircraft soared, a government report showed today, but the number declined slightly when transportation is stripped out.
Orders for big-ticket durable goods - items meant to last three years or more - advanced 2.5 per cent after falling a revised 2.7 per cent in January, the Commerce Department said.
Wall Street had expected a more modest 1.7 per cent gain after the surprise decline the previous month.
A 9.9 per cent increase in transportation equipment drove the advance, chalking up the largest rise since July 2002. Excluding transportation, new orders fell 0.3 per cent in February - the first decline in three months.
Demand for military aircraft surged 61.1 per cent after a 37.3 per cent fall in January and civilian aircraft gained 33.8 per cent after a 32.5 per cent decline.
Demand for motor vehicles was up 5 per cent from a 4.4 per cent retreat in January.
Non-defence capital goods excluding aircraft - a proxy for business spending - was up 1.1 per cent in February after dipping 0.3 per cent the month before.
A collapse in business investment was instrumental in tipping the United States into a 2001 recession and spending by companies remained sluggish in the following quarters.