Transportation, Defense Orders Push Durables Up 1.5%

New orders for durable goods increased 1.5% in February, the third consecutive monthly increase, but a closer look at the report issued by the Commerce Department on Tuesday raised some questions about the overall strength of the recovery.

Shipments of durable goods, which are manufactured products designed to last three years or more, fell 3.2% last month, Commerce said. This is not a good sign for trucking, since the manufacturing sector is one of its most important customers.

Excluding the volatile transportation sector, orders dropped 1.3% to $124.1 billion following a revised 0.2% rise the previous month.

The decline in orders excluding transportation was the first drop since September. Bloomberg said this is a sign that a full recovery in manufacturing sector will take a significant amount of time.

Another reason why analysts on CNBC questioned the strength of the economy was that orders for defense hardware jumped 78.6% in February. Excluding orders involved in the fight against terrorism, durable goods orders fell 0.2% after a 1.4% increase the month before.

The report showed that orders for vehicles and parts fell 5.9% in February, following a 5.3% increase the previous month.

Also, inventories of durable goods fell only 0.5% in February, after a 0.9% drop the month before.

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