U.S. durable goods orders rise broadly, boost growth outlook

WASHINGTON (Reuters) - Orders for long-lasting U.S. manufactured goods rose more than expected in March and a measure of business capital spending plans surged, bolstering views of an acceleration in growth in the second quarter.

The Commerce Department said on Thursday durable goods orders increased 2.6 percent as demand rose across all categories. Durable goods range from toasters to aircraft and are meant to last three years.

Orders advanced 2.1 percent in February instead of the previously reported 2.2 percent increase. Economists polled by Reuters had forecast orders rising 2.0 percent last month.

The report fit in with other data such as industrial production, retail sales and employment, that have suggested the economy gained steam after a troubled first quarter.

Growth in the first three months of the year is forecast to have braked sharply, because of an abnormally cold winter and an inventory overhang from last year that forced businesses to place fewer orders for goods with manufacturers.

The end of long-term unemployment benefits and cuts to food stamps have also robbed the economy of momentum.

First-quarter gross domestic product growth is estimated around a 1.5 percent annual rate. The economy grew at a 2.6 percent rate in the fourth quarter.

The durable goods report showed non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 2.2 percent in March after falling by a revised 1.1 percent the prior month.

Economists had expected orders for these so-called core capital goods to increase 1.5 percent last month after a previously reported 1.4 percent decline in February.

Core capital goods shipments rose 1.0 percent last month. Shipments of core capital goods are used to calculate equipment spending in the government's GDP measurement. They had increased 0.7 percent in February.

Last month, orders for transportation equipment increased 4.0 percent. That reflected a surge in civilian aircraft orders after Boeing orders more than doubled in March to 163.

Orders for motor vehicles rose 0.4 percent after gaining 4.3 percent the prior month. Orders excluding transportation increased 2.0 percent, the largest rise since January last year.

There were gains in orders for machinery, fabricated metal products and electrical equipment, appliances and components. Orders for computers and electronic products recorded their largest increase since November 2010.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)