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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.
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