Durable Goods Prove to Be Very Durable in March
Were prior reports on durable goods kept lower due to weather? It seems so. The March durable goods report from the Department of Commerce came in at a headline reading of 2.6%. Bloomberg was calling for a reading of only 2.0%, and its range from economists was flat to 3.5%. New orders for manufactured durable goods were up by $6 billion to $234.8 billion.
If you back out transportation, the reading was 2.0%. That was also above the 0.9% expected from the Bloomberg consensus reading. The range on ex-transportation was 0.2% to 1.2%. This was the biggest gain in over a year.
If you look at the key business spending reading — the non-defense capital goods ex-aircraft — it was up by 2.2% in March. This was the biggest gain since last November.
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Shipments of manufactured durable goods in March rose by $2.5 billion, or 1.1%, to $236.6 billion. This followed a 1.0% increase during the month of February.
Inventories of manufactured durable goods, up 11 of the past 12 months, increased $1.9 billion (or by 0.5%) in March to $394.1 billion, the highest level since the series was first published, on a NAICS basis. That followed a 0.8% gain during the month of February.
As a reminder, the durable goods report each month is one of the most volatile of all economic readings. With so many large ticket items, the results can fluctuate wildly even in expansion and contraction periods.
Filed under: Economy