Durable goods orders increase in February

Orders for long-lasting manufacturing goods increased in February, according to the U.S. Department of Commerce.

Durable goods, which constitute as products that will last for three years or longer, increased 2.2 percent from January. The jump in orders from January's 1.3 percent drop and is the first increase in two months. Among the sectors that showed improvements over the last month, commercial aircraft and defense orders grew by 13.6 percent and 13.5 percent, respectively.

Although long-lasting goods orders increased, non-defense capital goods not including aircraft supplies decreased during February. This sector dropped 1.3 percent after showing a promising jump of 0.8 percent in January. Omair Sharif, senior economist at RBS, said in an interview with Reuters the economic output of the first quarter 2014 was a little slow.

"First-quarter business investment looks to be soft, and it challenges some of the optimism surrounding the idea that capital expenditures were set to advance noticeably in 2014 from their 2013 pace," Sharif said.

One important indicator of how businesses are going to fare is shipments. Shipments of core capital goods is used to judge the spending of equipment used by the government for gross domestic product distribution. Core capital goods shipments increased 0.5 percent in February, an increase from January's 1.4 percent decline. Millan Mulraine, deputy chief economist at TD Securities, told Reuters an increase in core capital goods shipments could spell good things for the rest of the economy.

"The improvement in core capital goods shipments suggests that this sector of the economy could provide a modest boost to economic activity this quarter," Mulraine said.

Durable goods shipments also climbed over the last month by 0.9 percent, an increase after two consecutive months of decreases. 

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