Durable Goods Orders Up 0.9% in February, Boosting U.S. Industrial and Manufacturing Outlook

Durable Goods Orders Rise for Second Straight Month, Bolstering Industrial Demand Outlook

U.S. durable goods orders posted another monthly increase in February, reinforcing signs of strengthening demand across key industrial sectors. According to the U.S. Census Bureau, new orders rose 0.9% to $289.3 billion, following a revised 3.3% surge in January. The data marks two consecutive months of growth, signaling a potentially firmer rebound in manufacturing activity.

Transportation Equipment Leads Growth

Transportation equipment led the overall rise, with orders increasing by $1.4 billion, or 1.5%, to $98.3 billion. This sector has now posted two straight months of gains, contributing nearly half of February’s overall durable goods growth. The recovery in transportation demand, particularly in motor vehicles and aerospace, is supporting broader factory order momentum.

Core Orders Show Underlying Strength

Excluding the volatile transportation category, new orders still advanced 0.7%, suggesting a broad-based increase across durable goods sectors. Core orders, which exclude defense and transportation, are a key gauge of business investment. Notably, orders excluding defense rose 0.8%, reflecting private-sector strength amid easing interest rate pressures and stabilizing input costs.

Manufacturing Sentiment Improves

The back-to-back gains in durable goods orders are aligning with improving business sentiment across manufacturing. While February’s pace was slower than January’s jump, the consistency suggests firms are cautiously rebuilding inventory pipelines and responding to better forward demand visibility. This bodes well for supply chain normalization and capital equipment demand.

Market Forecast: Cautiously Bullish

The continued growth in core and transportation orders points to a cautiously bullish outlook for the manufacturing sector in the near term. Traders can interpret the data as a supportive signal for industrials and transportation stocks, as well as broader indices sensitive to capital investment cycles. With business spending appearing more resilient, durable goods momentum may offer upside support to Q1 economic growth expectations.