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U.S. Durable Goods Orders Surge In March Amid Rebound In Aircraft Demand

(RTTNews) - The Commerce Department released a report on Wednesday showing new orders for U.S. manufactured durable goods surged by much more than expected in March amid a substantial rebound in orders for transportation equipment.

The report said durable goods orders spiked by 3.2 percent in March after tumbling by a revised 1.2 percent in February.

Economists had expected durable goods orders to climb by 0.8 percent compared to the 1.0 percent slump that had been reported for the previous month.

The bigger than expected rebound by durable goods orders came as orders for transportation equipment soared by 9.1 percent in March after plunging by 3.1 percent in February.

Orders for non-defense aircraft and parts led the way higher, skyrocketing by 78.4 percent in March after plummeting by 8.4 percent in February.

Excluding the surge in orders for transportation equipment, durable goods orders rose by 0.3 percent in March after falling by 0.3 percent in February. Ex-transportation orders were expected to dip by 0.2 percent.

The uptick in ex-transportation orders largely reflected a jump in orders for computer and electronic products, which shot up by 1.9 percent in March after inching up by 0.2 percent in February.

Meanwhile, the report said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, fell by 0.4 percent in March after sliding by 0.7 percent in February.

Shipments in the same category, which is the source data for equipment investment in GDP, also decreased by 0.4 percent for the second consecutive month.

"We think the outlook for durable goods activity is gloomy as increasingly restrictive lending standards and relatively high interest rates will lead businesses and consumers to pull back on goods spending," said Oren Klachkin, Lead U.S. Economist at Oxford Economics.

He added, "Since tighter credit conditions inherently hit activity with a lag, we expect the greatest damage in H2 2023 and early 2024."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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