· During
March, new orders for durable manufactured goods dipped 0.3% after
falling 0.9% in February, a decline which was less than the 1.7% drop
reported initially. Consensus expectations had been for a slight 0.1%
uptick in March orders and it was the third consecutive m/m decline.
· Outsized weakness was registered in the transportation sector where new orders fell 4.6%. Excluding the volatile transportation sector durable goods orders rose 1.5%, double the expected gain. A 2.1% February decline in orders was little revised.
· The 4.6% decline in transportation equipment orders was led by a 4.6% (-14.7% y/y) downdraft in orders for motor vehicles & parts. That was partially offset by a 10.7% gain in new orders for aircraft & parts. Orders for nondefense aircraft & parts rose 5.5% (-18.9% y/y), about the same as they did in February.
· Orders for nondefense capital goods rose 1.5% after a revised 0.3% dip during February. During the last ten years there has been an 80% correlation between the y/y gain in nondefense capital goods orders and the rise in equipment & software spending in the GDP accounts. The correlation with capital goods shipments is, as one would expect, a larger 92%.
· March new orders for nondefense capital goods less aircraft were unchanged, following a little revised 2.0% February decline which was double the 1.0% drop during January.
· Orders for machinery
rose 6.2% (1.9% y/y) and recovered about half of the February decline. Computers
& related products orders rose 1.6% on the heels of February's
11.3% surge while new orders for communications equipment dipped 0.3%.
More extreme weakness in these orders is indicated by the sharp 19.2%
decline from their peak level last July. Primary metal orders ticked
up 0.2% (6.3% y/y).
· Overall shipments of durable goods dipped 0.4% (+0.4% y/y) as shipments from the transportation sector fell 1.9% (-5.3% Y/Y). Less transportation, shipments ticked up 0.2% (2.5% y/y).
· Inventories of durable goods backed up by 1.1% (5.1% y/y). The three month gain in durable goods inventories remained about steady with the prior several months at 8.6% (AR). That is, however, sharply elevated from the -0.1% rate of decumulation last August. Less transportation, inventories also rose at an accelerated 4.9% rate during the last three months.
· Maintaining Stability in a Changing Financial System: Some Lessons Relearned Again? From the Federal Reserve Bank of Kansas City can be found here.