 | Orders for durable goods rise 2.5% in March, 3.8% including revisions |
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Implications: New orders for durable goods showed considerable strength in March, rising 2.5% for the month and 3.8% including upward revisions for February, easily beating the consensus expectesd increase of 2.3%. Most major categories of new orders grew in March and were revised higher the previous month. Today's report was led by motor vehicles, industrial machinery, and primary metals. Including upward revisions for February, orders ex-transportation were up 2.2%, also beating consensus expectations. Meanwhile, shipments of "core" capital goods (which exclude civilian aircraft and defense) rose 2.2% in March. During the past 11 months, new orders for these core capital goods have been consistently above shipments, signaling that shipments should continue to increase. Given near record corporate profits and balance sheet cash, business investment is likely to bounce substantially over the next couple years. In other recent news, the Richmond Fed index, a measure of manufacturing activity in the mid-Atlantic, dropped to a still solid +10 in April from +20 in March. On the housing front, the Case-Shiller index, a measure of home prices in the 20 largest metro areas, declined 0.2% in February (seasonally-adjusted). The consensus expected a larger 0.4% drop.
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