updated 3/24/2004 8:46:22 AM ET 2004-03-24T13:46:22

Factories saw demand for big-ticket goods rebound in February, good news for the country's economic health and for manufacturers who have struggled to get their piece of the business recovery.

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The Commerce Department reported Wednesday that orders for "durable" goods — costly manufactured products that are expected to last at least three years — rose by 2.5 percent last month. That was an improvement from the 2.7 percent drop registered in January and represented the largest increase since October.

February's performance was better than economists were expecting. They were calling for a 1.2 percent rise in durable-goods orders.

February's rebound was led by stronger demand for transportation equipment, including cars and airplanes. Orders for those goods jumped by 9.9 percent in February, compared with a 10.5 percent decline in January. Last month's rise was the largest since July 2002.

Orders for computers, communications equipment, machinery and primary metals, which includes steel, all posted gains in February. But orders for fabricated metals and electrical equipment and appliances declined.

Excluding orders for goods from the military, all other durable-goods orders rose by 2 percent in February, after a 2.2 percent decrease the month before. That suggested that capital spending by private companies is improving.

Other recent economic reports indicate that manufacturing activity is picking up. But many plants continue to operate well below full throttle and employment is still weak. Manufacturers cut jobs in February for the 43rd month in a row.

Hardest hit by the 2001 recession, manufacturers over the past three years have had to cope with difficult economic times at home and abroad as well as compete against a flood of imports flowing in the United States.

Job losses, trade and overall economic conditions are hot-bottom issues in the presidential campaign.

President Bush, who says he understands Americans' concerns about the loss of U.S. jobs to other countries, had defended his free-trade policies against Democratic attacks and warned against economic isolationism. Bush says making his tax cuts permanent will strengthen the economy and spur job growth.

But presumptive Democratic presidential nominee John Kerry says swelling U.S. trade deficits and job losses are evidence that Bush's economic and trade policies aren't working.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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