Downside surprise in US durable goods orders for February, on account of snowstorms

Orders in the US for goods made to last more than three years fell unexpectedly last month, but only on account of the snowstorms that blanketed much of the country.

According to the Department of Commerce, in seasonally adjusted terms, new durable goods orders fell at a month-on-month pace of 1.1% in February to reach approximately $254.0bn.

Economists had penciled-in growth of 1.0%.

Commenting on the report, Ian Shepherdson at Pantheon Macroeconomics said the consensus had been "hopelessly optimistic", failing to take the snowstorms into consideration.

Indeed, had it not been for the rise in orders for civilian aircraft then total durable goods orders would have registered a bigger fall.

"The pre-storm trend in orders was rising at a rapid and steady pace, and manufacturing surveys remain very strong," he said.

"Accordingly, a clear rebound in March is a solid bet. The February numbers, in short, tell us nothing about the underlying trends in orders, and can be safely ignored."

Excluding transportation, durable goods orders declined by 0.9% on the month and excluding defence by 0.7%.

Nevertheless, in comparison to the same month one year before, total durable goods orders were up by 3.4%.

Falls in durable goods orders were nearly across the board, outside of those for electrical equipment (0.2%) and non-defence aircraft and parts, with the latter 103.3% higher to $9.5bn.

Orders for capital goods, excluding defence and civilian aircraft, or so-called 'core capital goods orders' also dropped, by 0.8% to approximately $72.5bn.