US factory orders surge

New orders to U.S. factories rebounded more than expected in February after two months of declines, with shipments posting their biggest gain in seven months, the government reported Wednesday in a further sign the economy was regaining momentum after a severe winter. The Commerce Department said new orders for manufactured goods jumped 1.6 percent in February, the most in five months, following declines of 1 percent in January and 2 percent in December. Shipments of new orders increased 0.9 percent, the biggest advance since last July. Factory orders rose across most categories in February, with big gains in transportation, primary metals, and computers and electronic products. Orders for electrical equipment, appliances, and machinery fell. But the overall February gain mostly reflected a rebound in orders for commercial aircraft and autos, which both had fallen the previous two months. Aircraft orders rose 13.4 percent, while orders for autos and auto parts increased 3 percent. Factory orders excluding volatile transportation goods rose 0.7 percent in February, the biggest gain since last July. The category fell 0.1 percent in January. However, orders for core capital goods, considered a gauge of business investment plans, fell 1.4 percent in February, the second decline in the last three months. Factory activity still is recovering from unusually cold weather that limited output in December and January. Factories also remain constrained as businesses try to sell a glut of unsold inventory from the second half of 2013. Economists expect a rebound in factory orders and production in coming months as winter ends. Encouraging signs this week include reports that manufacturing grew at a slightly faster rate in March, and U.S. auto sales rose a bigger-than-expected 6 percent in March, analysts say.