US Durable Good Market Raises More than the Estimated Percentage

Estimated Percentage

US manufactured goods market seems to recover from the previous gloom. In February, orders received from consumers for durable manufactured goods have increased from last two months. The finding will no doubt impress the US commerce department.

During two consecutive months December and January, orders for durable good have declined. In February however, it rose 2.2%. It should be mentioned that increase in order percentage was well above what forecasters predicted.

This year’s January, orders for durable goods dropped 1.3 percent. Analysts expected it to rise 1% next month. However, it was more than 1.2% of the estimated figure. US economists are looking at the report with related data such as production by industrial units, sales made by retail merchants and employment statistics.

These data suggest that the economy has just started to get up to the speed. An economist name Sam Bullard said, “We are still encouraged by the outlook on the factory sector once we get past this period.”

However, the automobile industry may have to face a slowdown in future because of increase in order for cars. People who are purchasing cars now would use them for next couple of years. So, there may be less demand for cars in future.

Demand for refrigerators has also been high in February. Households that purchased refrigerators during the months of January and February may face technical issues and to sort them out, may call professional help. Thus, service sector might see growth in future.

Order for durable goods that are really bulky or used mostly for industrial or similar purposes such as aircraft, trains, bottling plant equipment, drilling machinery hasn’t seen an impressive growth last month.

There was a slight increase in the percentage of order for core durable goods. But it has failed to meet the estimated mark. The forecast was 0.3% gain, but the gain was 0.2% and that too was seasonally adjusted. One good thing that came out from those data is that factories worked during the chilling winter. This indicates higher demand for factory-made goods.

US economists are giving weight to this finding as they believe 2014 may draw more investment provided weather situation would be normal. An economist called Gus Faucher said, “We should still see some solid business investments in 2014. We have some weather impact on new orders in February. Orders should gradually improve this year.”

Hopefully, demand for durable consumer goods will increase in this year.