Durable Goods Orders Fall in February as Aircraft Demand Weakens

Orders for durable goods fell in February, breaking a three-month stretch of gains and increasing worries that the economic slowdown at the turn of the year may drag on well into 2019.

Durable-goods orders fell 1.6% last month, the Commerce Department said, more than the 1.1% decline expected by economists.

Analysts had widely expected a drop in orders for civilian aircraft, a volatile number that had posted unusually solid gains in recent months. Along those lines, non-defense aircraft orders tumbled 31% in February, pushing the headline number lower. That sub-sector could stay under pressure next month too, given the reaction of airlines around the world to the Boeing 737 Max 8 crash in Ethiopia.

Excluding the volatile transportation sector, orders gained 0.1%, although that still missed the 0.3% consensus forecast.

U.S. economic growth has been on a rough path in 2019, as declines in personal income have fed through to weak retail sales numbers, while the government shutdown also knocked confidence and disrupted activity. February’s employment report added to the pessimism, showing meager job creation of just 20,000 posts. The March labor report, due on Friday, will show whether that was just a blip or the start of a more ominous trend.

In a more positive sign on Monday, the Institute of Supply Management said manufacturing activity staged a stronger-than-expected rebound in March after hitting a two-year low the previous month.