Durable-good sales up, but lag forecast
Slip in aircraft orders saps momentum
Orders for U.S. durable goods rose less than expected in March as a decrease in bookings for commercial aircraft interrupted recent strength in manufacturing.
Bookings for durable goods — or items meant to last at least three years — increased 0.5% last month after a revised 0.9% decrease in February, Commerce Department figures showed Monday. Orders excluding transportation equipment rose 1.6%, in line with projections.
The median estimates in a Bloomberg survey of economists called for a 2.3% increase of total durable goods orders.
The softer March figures, on the heels of a decline in February, represent a departure from other manufacturing data that have shown broad-based strength. Orders for commercial aircraft dropped almost 47% during the month.
While U.S. plane maker Boeing Co. reported 196 orders in March, the company’s strongest month of bookings since 2018 and more than double the prior month’s figure, economists noted sizable cancellations also occurred. The government’s data aren’t always directly comparable on a month-to-month basis.
However, the report showed orders picked up for metals, machinery, motor vehicles and communications equipment. A broader reopening of the economy and expected unleashing of pent-up consumer demand in addition to steady corporate spending are seen fueling overall production in the coming months.
Even so, output growth will be challenged by lingering capacity constraints and supply shortages that have sparked a pickup in raw-materials prices.
Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business investment, rose 0.9% after a revised 0.8% decline. The median projection was for a 1.7% gain.
Core capital goods shipments, a figure that will be used to calculate investment in the government’s first quarter gross domestic product report Thursday, increased 1.3% in March. That brought the three-month annualized gain to 10.3%.
The economy is forecast to have grown at an annualized pace of 6.6% in the first three months of the year, as government stimulus, loosening restrictions and millions of vaccinations bolstered growth.