New Orders in Durable Goods decreased -0.9% for February 2011, after last month's +3.6% increase, which was significantly revised. To read why last month's report was not good news, click here.

Core capital goods new orders decreased -1.6%, after dropping -6.0% last month. Core capital goods is an investment gauge for the bet the private sector is placing on America's future economic growth.

New orders in Machinery dropped -4.2% in February after plunging -12.7% in January. Nondefense aircraft & parts new orders increased another 26.7% in after the outrageous 5,563.8% January increase. Defense air-o-plane orders, on the other hand, decreased -18.4%. Without defense, durable goods new orders, total, increased +0.4% in February.

For all transportation equipment, new orders dropped -1.9%, yet motor vehicles increased +1.9%.

New orders has declined four of the last five months. The exception was the great January air-o-plane blow out. Below is the percentage change in durable goods since January 2008.

Defense capital goods new orders plunged -24.8%.

Once again, we have bad news for core capital goods, the stuff to make more stuff. Realize businesses and nations just don't go out and buy a billion dollar air-o-plane every day. Machinery is a large part of core capital goods.

Core capital goods are a leading indicator of future economic growth. It's all of the stuff used to make other stuff, kind of an future investment in the business meter. Core capital goods excludes defense and all aircraft. Shipments in core capital goods increased 0.8%. Note, core capital goods has not recovered to 2007 levels.

To put the monthly percentage change in perspective, below is the graph of core capital goods, monthly percentage change going back to 2000. In January 2009, core capital goods new orders dropped -9.9% and also declined by -9.4% in December 2008.

Inventories, which also contributes to GDP, were up +0.9% in February 2011 for manufactured durable goods, with transportation inventories increasing +0.9%. Core Capital Goods inventories increased +0.8%.

Unfilled orders increased +0.4% and if one adds in unfilled orders with new orders in manufacturing, the February advance percentage from January was -1.6%.

Shipments, which contributes to the investment component of GDP, is up 0.3% in February. In core capital goods, shipments increased +0.8%, which, when added to January's -2.3% percentage change in core capital goods shipments, is not good news as an approximation and indicator on Q1 2011 GDP growth. March durable goods shipments needs to be a blow out at this point for Q1 2011 GDP estimates to not be revised down.

Producer's Durable Equipment (PDE) is part of the GDP investment metric, the I in GDP or nonresidential fixed investment. It is not all, but part of the total investment categories for GDP, usually contributing about 50% to the total investment metric (except recently where inventories have been the dominant factor).

Producer's Durable Equipment (PDE) is about 75%, or 3/4th of the durable goods core capital goods shipments, used as an approximation.

Here is last month's advance report overview, but unrevised.

What is a durable good? It's stuff manufactured that's supposed to last at least 3 years. Yeah, right, laptops and cell phones.