U.S. Durable Goods Orders Recover in March as Aircraft Orders Rebound
by:Tom Moeller
|in:Economy in Brief
Summary
- Increase in total orders is first in three months.
- Orders improve modestly in most categories.
- Shipments and order backlogs rise, but inventories decline.
In this Advance Report, Durable Goods Orders rose 3.2% (4.6% y/y) in March after weakening 1.2% in February and falling 5.0% in January. Expectations had been for a 0.7% rise in the Action Economics Forecast Survey.
A 9.1% increase (13.0% y/y) in transportation sector orders led last month’s gain, following sharp declines in the prior two months. Orders for nondefense aircraft & parts surged 78.4% last month after falling 8.4% in February. Orders for defense aircraft also were strong and increased 10.4% (28.2% y/y) and followed a 7.7% drop. Elsewhere in the transportation sector, motor vehicle & parts orders eased 0.1% (+6.3% y/y) following a 1.0% decline in February. Subtracting transportation sector orders, durable goods orders rose 0.3% (0.5% y/y) and reversed the February shortfall.
Machinery orders were little changed (+1.9% y/y) after falling 1.1% in February. Computer & electronic product orders rose 1.9% (4.0% y/y) after two consecutive 0.2% improvements. Rising by 0.8% (5.4% y/y) were electrical equipment & appliance orders, which added to a 0.3% February increase. Fabricated metals orders improved 0.1% (-2.0% y/y) after rising 0.7%. Primary metals orders also rose 0.1% (-3.3% y/y), following a 0.3% decline.
Capital goods orders rose 8.7% (8.2% y/y) after sharp declines in three of the prior four months but nondefense capital goods orders less aircraft eased 0.4% (+2.0% y/y) following a 0.7% decline. Defense capital goods orders fell 0.5% (+11.0% y/y) following a 6.8% drop.
Shipments of durable goods rose 1.1% (4.9% y/y) after weakening 0.8% in February. Shipments of nondurable goods fell 1.4% (-1.7% y/y) after a 1.1% February decline. Total manufacturing shipments eased 0.1% (+1.6% y/y) in March after declining 1.0%. Transportation equipment shipments strengthened 3.7% (13.0% y/y) last month and made up most of the prior two months’ decline. Excluding transportation, shipments of durable goods eased 0.2% (+1.2% y/y), down for the fourth month in the last five. Core capital goods shipments weakened 0.4% (+ 4.3% y/y) for the second straight month.
Unfilled durable goods orders rose 0.4% last month (5.4% y/y) after holding roughly steady in February. Manufacturing inventories declined 0.8% (+2.3% y/y) in March after negligible declines during the prior two months. Durable goods inventories fell 0.9% (+2.7% y/y) while nondurable goods inventories fell 0.5% (+1.6% y/y) and have been falling since July of last year.
Manufacturers’ orders and shipments of durable goods, as well as nondurable goods, are available in Haver’s USECON database. Unfilled orders and inventories are also included. The Action Economics forecast data are in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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