Ahead of the Bell: US durable goods

Orders to US factories for long-lasting manufactured goods will show rebound in February

Associated Press
Durable goods orders up, but key category weakens
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FILE - In this Thursday, Jan. 16, 2014, file photo, a woman walks through a display of refrigerators at a Lowe's store in Cranberry Township, Pa. The Commerce Department releases durable goods for February on Wednesday, March 26, 2014. (AP Photo/Gene J. Puskar)

WASHINGTON (AP) -- The Commerce Department releases data on orders to U.S. factories for long-lasting manufactured goods in February. The report is scheduled for 8:30 a.m. EDT Wednesday.

ORDERS UP: The forecast is that orders will rise by 0.8 percent in February following two months of declines, according to a survey by FactSet.

WINTER DIP: Orders for durable goods, items expected to last at least three years, fell in the two previous months, falling a sharp 5.3 percent in December and 1 percent in January.

But economists expect production will strengthen in coming months reflecting better weather after a series of winter storms which disrupted production at some factories.

The Institute for Supply Management said that its gauge of manufacturing activity expanded more quickly in February as companies received more orders and boosted their stockpiles.

The institute's manufacturing index rose to 53.2 in February, up from 51.3 in January. That only partially reversed a five-point drop in January. Any reading above 50 indicates that manufacturing is expanding.

The ISM index had risen for six straight months until falling slightly in December and taking a big tumble in January as heavy snow caused factories to close.

The bad weather depressed purchases of homes and autos, causing factories to trim their production schedules for autos, furniture and appliances in January. However, the Federal Reserve reported that factory output rebounded strongly in February. The February gain was the largest in six months.

Economists hope that manufacturing and the broader economy are emerging from a winter slump. They expect the overall economy slowed to growth of less than 2 percent in the January-March period. But they are forecasting growth will rebound to around 3 percent for the rest of the year. If that occurs, it would be the fastest annual economic growth since 2005.

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