Implications: Business investment is getting its mojo back. New orders for durable goods rose once again in February following a healthy increase in January. The February rise was due in large part to commercial aircraft orders, but strip out the volatile transportation sector and durable goods orders still rose 0.4%. Non-transportation orders were led higher in February by primary metals, electrical equipment, appliances & components, and machinery. These non-transportation orders have been steadily trending higher since mid-2016, and have risen in each of the last six months. Meanwhile machinery orders rose once again in February and have not shown a monthly decline since April of last year. This is, in part, a sign of continued improvements in the energy sector, which had been pulling down machinery investment since oil prices started declining in mid-2014. Shipments of "core" capital goods - non-defense, excluding aircraft – rose 1.0% in February. If unchanged in March, these shipments will be up at a 6.9% annual rate in Q1 versus the Q4 average. This series is important for GDP and, despite a modest decline in new orders for "core" capital goods in February, should continue to be a positive contributor to growth in the quarters ahead. Taken as a whole, today's report on durable goods supports the pickup in manufacturing activity seen in other economic reports, and suggests that confidence from both consumers and companies is on the rise.
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