The durable goods report showed that the 1.2%
February gain which pushed total orders to a
seasonally adjusted $249.4 billion, was the best
performance since a 2.8% advance in December.
A key category that serves as a proxy for
businesses plans on investment fell by 0.8% in
February after a 1% rise in January. This category,
which has been weak over the past year, had
fallen 0.8% in December.
Many analysts believe the virus has already
pushed the country into a recession with the
most pessimistic forecasting that the overall
economy, as measured by the gross domestic
product, could plunge by 20% or more in the
April-June quarter.
Analysts said they expected a sharp
deterioration in orders to show up in the
March report.
“Businesses were not canceling orders yet to any
significant degree, but that’s going to change
in March as the coronavirus will take a toll on
factory production in many states which have
shelter-in-place rules” said Chris Rupkey, chief
financial economist at MUFG in New York.
Gregory Daco, chief U.S. economist at Oxford
Economics, said, “We now believe the additional
headwind posed by the coronavirus will lead to
one of the largest pullback in capital spending of
all times.”
The February report showed that the increase
was led by a 1.8% increase in orders for motor
vehicles and parts. Excluding the transportation
sector, orders would have fallen by 0.6%.
Orders for machinery fell by 0.5% while orders
for computers were down 0.6%.Image: Steven Senne