US durable goods orders strong in March outside of civilian aircraft

(Sharecast News) - Orders in the US for goods made to last more than three years fell short of market expectations last month, but only as a result of weakness in the often volatile category of civilian aircraft.
According to the Department of Commerce, so-called durable goods orders grew at a month-on-month pace of 0.5% to reach $256.32bn.

Economists had penciled-in an increase of 1.2%.

However, excluding the transportation sector, orders were up by 1.6% on the month to reach $174.5bn, as expected by economists.

Orders for non-defence aircraft and parts on the other hand nearly halved, shrinking by 46.9% to $5.1bn.

So-called core capital goods orders, a closely-followed lead indicator for business investment, rose by 0.9% versus February to reach $75.9bn (consensus: 1.5%).

Included among capital goods industries were those for small arms and ordnance, as well as machinery and equipment for a wide range of industries, from agriculture to telecommunications.

Total durable goods orders for February were revised higher to show a fall of 0.9%, versus a preliminary estimate of a 1.2% decline.

Jonathan Millar and Pooja Sriram at Barclays Research labeled Monday's report as "good".

"In our view, the sharp rebound in ex-transportation durable goods orders verifies that February's weakness was weather-related," they said in a research note sent to clients.

On the back of the same report they also bumped up their tracking estimate for first quarter US GDP growth by three tenths of a percentage point to 5.6%.

The US Department of Commerce was scheduled to publish its preliminary reading on first quarter US GDP on 29 April.