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Ahead of the Bell: US durable goods

US durable goods likely showed small gain in February

Associated Press
US durable goods orders stumbled in February

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In this March 13, 2015 photo, a worker inspects a new 2015 aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant, in Claycomo, Mo. The Commerce Department releases its February report on durable goods on Wednesday, March 25, 2015. (AP Photo/Charlie Riedel)

WASHINGTON (AP) -- The Commerce Department releases its February report on orders for durable goods Wednesday at 8:30 a.m. Eastern.

ORDERS UP: The expectation is that orders to U.S. factories for long-lasting manufactured goods posted a modest gain of 0.4 percent in February, according to a survey of economists by data firm FactSet.

ORDERS REBOUND: In January, orders for durable goods rebounded with a 2.8 percent gain after two consecutive months of declines. It was the largest increase in six months.

Economists are hopeful that manufacturing is beginning to turn the corner after a period of weakness in the second half of last year. There remains some uncertainty about February given the unusually cold weather and a labor dispute that shackled West Coast ports.

Demand in a category that serves as a proxy for business investment increased 0.5 percent in January and analysts were looking for a further increase in February. This category of core capital goods orders, which excludes military and aircraft orders, fell every month from September through December.

Economists believe that strong consumer spending will boost domestic demand and help to offset global weakness and a strong dollar, both of which are hurting U.S. export sales.

Growth in the overall economy slowed significantly in the October-December quarter with a widening trade deficit trimming growth by more than a percentage point.

The government will release its third and final estimate of economic growth in the fourth quarter on Friday and the expectation is that growth will be boosted slightly to a rate of 2.4 percent, up from the previous estimate of 2.2 percent. But that would still leave the economy expanding far below the 5 percent rate seen in the third quarter. And economists believe growth has remained sluggish in the current January-March period at around 2 percent.

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