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VOL. 127 | NO. 66 | Wednesday, April 04, 2012

US Factory Orders Up 1.3 Pct.

MARTIN CRUTSINGER | AP Economics Writer

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WASHINGTON (AP) – Businesses ordered more machinery and equipment from U.S. factories in February, a signal that many are investing in their companies despite the expiration of a tax credit.

Orders to U.S. factories increased 1.3 percent in February, the Commerce Department said. That offset a similar decline in January.

Demand for so-called core capital goods, a gauge of business investment plans, rose 1.7 percent. That was better than the government’s preliminary estimate last week and followed a steep drop in January.

U.S. factory orders have been steadily rising since the recession ended nearly three years. Orders totaled $468.4 billion in February, just 3.4 percent below the previous peak hit in 2008.

Last year, businesses could reduce their taxable profits by an amount equal to the cost of a major investment. The credit spurred a jump in orders for industrial machinery, computers and other capital goods at the end of last year. Spending on core capital goods surged 3.5 percent in December, then fell by nearly as much in January after the tax credit expired.

Joshua Shapiro, chief economist at MFR Inc., wrote in a note to clients that the rebound in February suggests the tax credit played “a substantial role in the December/January gyrations.”

In February, orders for durable goods, items expected to last at least three years, increased 2.4 percent. That was slightly higher than the estimate the government made in last week’s preliminary report.

Transportation orders rose a solid 3.9 percent in February. Demand in the volatile commercial aircraft category increased 6 percent. Orders for cars and auto parts edged up 0.2 percent.

Orders for nondurable goods, such as paper, chemicals and food, rose 0.4 percent in February.

A vibrant manufacturing sector has helped drive the best job growth in two years. The economy added an average of 245,000 jobs per month from December through February. Those gains helped lower the unemployment rate to 8.3 percent. Manufacturers have added more than 100,000 jobs in the past three months, about one-seventh of the total net gain in employment over this period.

The Labor Department will release the March jobs report on Friday. Economists forecast employers added 210,000 jobs and the unemployment rate was unchanged at 8.3 percent.

U.S. factories stepped up hiring and production in March, based on a report Monday from the Institute for Supply Management.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 72 218 10,440
MORTGAGES 91 293 13,620
FORECLOSURE NOTICES 25 68 2,712
BUILDING PERMITS 0 393 24,700
BANKRUPTCIES 62 184 10,076
BUSINESS LICENSES 25 62 3,798
UTILITY CONNECTIONS 90 338 14,895
MARRIAGE LICENSES 10 68 3,235

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