Drop in US durable goods orders

Car orders were down by 2.7%

US durable goods orders declined 1.7% in February, official figures have shown, the latest indication that the US economy faces the risk of recession.

The fall surprised analysts, who had expected the latest monthly data from the Commerce Department to show a 0.8% rise for last month.

The latest manufacturing data came as separate official figures showed yet another monthly fall in US home sales.

Sales of new houses fell 1.8% last month to a 13-year low.

They declined to an annual rate of 590,000.

The figure, which was also from the Commerce Department, marked the fourth straight month that sales of new homes had declined.

'Real downturn'

Sales of durable goods - those designed to last more than three years - fell by a revised 4.7% in January.

Sales of new US homes are at a 13-year year

Excluding defence goods and aircraft, February's drop worsened to 2.6%.

Machinery orders slumped 13.3% last month, the steepest decline since records began in 1992, while car orders dropped 2.7%.

"This [durable goods] report further corroborates the notion that, in addition to the financial crisis, the US faces a real economic downturn," said TJ Marta, a fixed income strategist at RBC Capital Markets in New York.

Other analysts said both latest manufacturing and housing figures will increase the pressure on the Federal Reserve to cut US interest rates further.

They come a day after a separate report indicated a sharp downturn in US consumer confidence.