By Bryan Mena

New orders for durable goods - products meant to last at least three years - decreased 1% in February to a seasonally adjusted $268.4 billion, the Commerce Department said Friday.

Demand for U.S.-made durable goods - which include factory equipment, computers and washing machines - declined on weaker orders for cars, planes and military equipment. Excluding transportation, orders were unchanged from the prior month. When excluding defense, new orders fell 0.5% in February from the prior month.

Orders for motor vehicles and parts fell 0.9% and defense aircraft and parts declined 11.1%, the department said.

The overall February drop came after a revised 5% decrease in January, a larger fall than previously estimated.

The figures measure demand from businesses and consumers - and also reflect rising prices. Orders figures aren't adjusted for inflation. Consumer price increases have cooled recently, but remain historically high.

The Federal Reserve moved to raise interest rates by a quarter percentage point this week as it tries to tame still-high inflation. Higher interest rates can make big-ticket purchases more expensive for businesses and consumers.

A closely watched proxy for business investment - new orders for nondefense capital goods excluding aircraft - increased 0.2% to $75.2 billion in February compared with the previous month, the Commerce Department said.

Write to Bryan Mena at bryan.mena@wsj.com

(END) Dow Jones Newswires

March 24, 2023 09:09 ET (13:09 GMT)