New orders for US factory goods rebounded in February and firms increased orders for capital goods, suggesting manufacturing held on to some momentum early in the year. The Commerce Department said on Tuesday new orders for manufactured goods rose 1.3 percent, just below the 1.5 percent gain expected by private forecasters in a Reuters poll.
Growth in the US economy likely slowed in the first quarter as weaker restocking of companies' shelves kept factories less busy. Also weighing on factories, m any economists think the expiration of some tax breaks on capital spending at the end of 2011 led businesses to bring forward investments.
Indeed, January's decline was revised downward to 1.1 percent from a previously reported fall of 1 percent. New orders for durable goods - long lasting products from toasters to airplanes - rose 2.4 percent in February. That was higher than the government's initial estimate of a 2.2 percent increase.
Orders for non-defence capital goods excluding aircraft - a closely watched category because it is taken as a sign of businesses' future spending plans - rose 1.7 percent in February. That was a bigger increase than 1.2 percent gain reported in a preliminary estimate. Shipments for this category climbed 1.4 percent. Business spending and manufacturing have been drivers of the recovery since the 2007-2009 recession.