The United States apparently still manufactures some things, contrary to the reports about us only being a service economy. The Commerce Department showed that factory orders rose by 3.0% in February to just under $492 billion. A prior factory orders report was put at -1.0%. Both figures met the Dow Jones consensus targets.
A huge demand spike in civilian aircraft offset declines in computers, chemicals and machinery. If the report sounds familiar, much of it ties in directly to the very volatile durable goods report we saw last week.
It is also worth noting that nondurable goods orders from factories were up 0.8%, and that was about 58% of the month’s reading, due in part to oil refinery orders and production.
The report in durable goods now appears to be 5.6%, versus the preliminary 5.7%. Note that much of the military spending hikes were also ahead of the sequestration impact. With sequestration being only a month old now, we would look for volatile readings over the next couple of months until things smooth out in the reporting.