US durable goods orders slump back lower

US capital investment in durable goods fell back into decline in February, after a spike in January, according to data from the Commerce Department.

Durable goods orders fell 2.8% on the previous month, slightly better than the -3.0% consensus estimate and down from the revised increase of 4.20% the month before.

Headline orders were dragged by a sharp drop in defense orders, accounting for 0.9%, with civilian aircraft orders also much lower that month, as flagged by Boeing.

Durable goods excluding transport declined 1.0%, worse than the -0.3% consensus.

Core capital goods orders, ex-defence and -aircraft, was down 1.80% month-on-month in February, worse than the -0.50% estimate and well below the revised 3.10% gain from January.

Economist Ian Shepherdson at Pantheon Macroeconomics said while the print was a disappointing, the core capex trend was flat, not down, and predicted a March rebound was a safe bet.

"The real disappointment here is in the core capex component, down 1.8%. But these numbers are exceptionally volatile and the underlying trend is nothing like as weak as the February reading, but we had hoped that the uptick in the ISM manufacturing survey would be reflected in better numbers.

"We think the manufacturing sector is stabilizing, at least, but it will take a while longer for this to be reflected in all the data. The drag on capex orders from the collapse in the oil business cannot have much further to run, but predicting the exact timing of the bottom is impossible."