A report released by the Commerce Department on Wednesday showed an unexpected increase in new orders for U.S. durable goods in the month of February.
The Commerce Department said durable goods orders jumped by 1.2 percent in February after a revised uptick 0.1 percent in January.
Economists had expected durable goods orders to decrease by about 0.8 percent compared to the 0.2 percent dip that had been reported for the previous month.
The unexpected increase in durable goods orders was largely due to a substantial rebounded in orders for transportation equipment, which spiked by 4.6 percent in February after falling by 0.9 percent in January.
"For once that wasn't driven by the volatile aircraft orders figures, but instead reflected a 1.8% increase in vehicle orders and a 32% m/m surge in other transport orders," said Michael Pearce, Senior U.S. Economist at Capital Economics.
However, excluding the jump in orders for transportation equipment, durable goods orders fell by 0.6 percent in February after climbing by 0.6 percent in January. Economists had expected a 0.4 percent drop.
Orders for fabricated metal products, primary metals and computers and electronic products showed notable decreases, offsetting a jump in orders for electrical equipment, appliances and components.
The report also said orders for non-defense capital goods, excluding aircraft, a key indicator of business spending, fell by 0.8 percent in February after surging up by 1.0 percent in January.
Shipments in the same category, which is the source data for equipment investment in GDP, slid by 0.7 percent in February after jumping by 1.1 percent in the previous month.
"The rise in durable goods orders in February reflected a surge in transport orders, with underlying capital goods orders and shipments falling back," Pearce said.
He added, "That suggests business equipment investment was on track to broadly stagnate in the first quarter, even before the virus crushed domestic demand."
Next Thursday, the Commerce Department is due to release a separate report on factory orders in the month of February, which includes orders for both durable and non-durable goods.