Economy

Durable Goods Orders Lower Than Expected in March

April 27, 2017

Durable goods orders rose to a lower rate in March than expected. New orders rose 0.7 percent to $238.7 billion, well under the Bloomberg forecast of 1.3 percent. Orders for core capital goods (non-military capital goods minus aircraft that are used in GDP calculation) rose 0.2 percent, less than the 0.5 percent predicted.

Automotive vehicles and parts dropped 0.8 percent as automotive sales slow in 2017 after robust growth in the past two years.

Bloomberg Markets comments, “The figures indicate that the slowdown in auto demand from consumers and tepid business investment weighed on manufacturers and sapped some economic momentum at the end of the first quarter. Traction in tax-reform legislation, following the Trump administration’s release of a plan this week, might hearten businesses that have long delayed spending amid tighter regulations since the last recession. While figures due Friday may show GDP growth of around 1 percent in the first three months of the year, economists expect a rebound from that pace.”

The report from the Commerce Department is reprinted below.

April 27, 2017 — The U.S. Census Bureau announces the March advance report on manufacturers’ shipments, inventories and orders:

New Orders
New orders for manufactured durable goods in March increased $1.6 billion or 0.7 percent to $238.7 billion, the U.S. Census Bureau announced today. This increase, up three consecutive months, followed a 2.3 percent February increase. Excluding transportation, new orders decreased 0.2 percent. Excluding defense, new orders increased 0.1 percent. Transportation equipment, also up three consecutive months, drove the increase, $2.0 billion or 2.4 percent to $83.3 billion.

Shipments
Shipments of manufactured durable goods in March, up four of the last five months, increased $0.6 billion or 0.2 percent to $239.8 billion. This followed a 0.2 percent February increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $0.4 billion or 0.5 percent to $81.7 billion.

Unfilled Orders
Unfilled orders for manufactured durable goods in March, up two consecutive months, increased $2.5 billion or 0.2 percent to $1,119.0 billion. This followed a 0.1 percent February increase. Transportation equipment, also up two consecutive months, led the increase, $1.6 billion or 0.2 percent to $755.5 billion.

Inventories
Inventories of manufactured durable goods in March, up four of the last five months, increased $0.5 billion or 0.1 percent to $385.7 billion. This followed a 0.2 percent February increase. Machinery, also up four of the last five months, led the increase, $0.4 billion or 0.6 percent to $66.7 billion.

Capital Goods
Nondefense new orders for capital goods in March increased $0.9 billion or 1.2 percent to $75.0 billion. Shipments increased $0.9 billion or 1.3 percent to $73.0 billion. Unfilled orders increased $2.0 billion or 0.3 percent to $693.4 billion. Inventories increased $0.8 billion or 0.4 percent to $171.7 billion. Defense new orders for capital goods in March increased $1.1 billion or 12.2 percent to $10.4 billion. Shipments decreased $0.5 billion or 4.0 percent to $10.9 billion. Unfilled orders decreased $0.6 billion or 0.4 percent to $137.3 billion. Inventories decreased $0.3 billion or 1.3 percent to $21.1 billion.

Revised February Data
Revised seasonally adjusted February figures for all manufacturing industries were: new orders, $477.7 billion (revised from $476.5 billion); shipments, $479.8 billion (revised from $480.0 billion); unfilled orders, $1,116.6 billion (revised from $1,115.3 billion) and total inventories, $630.0 billion (virtually unchanged).