The sharp drop in new orders for manufactured durable goods in February reported by the Commerce Department suggests that “war jitters have put the manufacturing recovery in a holding pattern,” said David Huether, chief economist of the National Association of Manufacturers.

“Following a strong 1.9 percent bounce in January, new orders for manufactured durable goods declined by 1.2 percent to $170.2 billion last month,” Huether said. “Increased oil prices and a large decline in consumer confidence in February are clear signs that anticipation of conflict with Iraq heightened uncertainty. Purchases of big-ticket items declined and new orders declined in every category, with the exception of defense capital goods. Of note is that non-defense capital goods orders, which are a good indicator for business investment demand, dropped a sharp 5.2 percent after increasing the previous two months. Clearly, many businesses are putting on hold investment purchases for now.

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