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Economy in Brief

U.S. Durable Goods Orders Disappoint in March
by Tom Moeller  April 26, 2021

• Transportation orders decline sharply for a second month.

• Orders of core capital goods reverse February decline.

• Shipments rebound while order backlogs & inventories rise.

Manufacturers' orders for durable goods rose 0.5% in March (25.0% y/y) after falling 0.9% during February due to winter storms, revised from -1.1%. A 2.4% jump had been expected in the Action Economics Forecast Survey.

Last month's disappointment owed largely to a 1.7% decline (+62.5% y/y) in transportation orders as it followed a 2.0% February weakening. A 5.5% increase (26.6% y/y) in motor vehicle & parts bookings was offset by a 38.2% falloff in aircraft & parts orders.

Orders for nondefense capital goods excluding aircraft improved 0.9% last month (11.6% y/y) as it followed a 0.8% February weakening.

In the major categories of the report, primary metals orders rose 1.2% (15.1% y/y) while fabricated metals orders strengthened 3.6% (16.6% y/y). Machinery orders rose 1.0% (9.7% y/y) while computer & electronic product orders edged 0.5% higher (10.1% y/y) following two months of decline. These increases were offset by a 1.5% falloff (+7.4% y/y) in orders for electrical equipment and appliances.

Shipments of durable goods increased 2.5% (10.0% y/y) following a 3.6% decline. Shipments of core capital goods rose 1.3% (10.4% y/y). Shipments of transportation products rebounded 4.8% (11.7% y/y) as auto and aircraft shipments improved. Shipments excluding transportation rebounded 1.5% (9.3% y/y) after and reversed February's weakening.

Unfilled orders for durable goods improved 0.4% (-3.3% y/y) last month after a 0.9% increase. Order backlogs, excluding transportation, rose 1.2% (7.7% y/y) for a second consecutive month.

Inventories of durable goods jumped 1.0% (1.7% y/y) in March, the strongest increase since July 2018. Excluding transportation, inventories increased 0.8% (0.3% y/y) and have been rising for seven consecutive months.

The durable goods figures are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.

Durable Goods NAICS Classification Mar Feb Jan Mar Y/Y % 2020 2019 2018
New Orders (SA, % chg) 0.5 -0.9 3.6 25.0 -7.1 -1.5 7.1
    Transportation -1.7 -2.0 7.6 62.5 -20.0 -4.8 9.2
  Total Excluding Transportation 1.6 -0.3 1.7 12.8 -0.3 0.4 5.9
    Nondefense Capital Goods Excl. Aircraft 0.9 -0.8 0.7 11.6 1.6 1.7 4.6
Shipments 2.5 -3.6 1.8 10.0 -5.2 0.8 6.6
    Nondefense Capital Goods Excl. Aircraft 1.3 -1.1 2.0 10.4 0.2 2.4 5.7
Unfilled Orders 0.4 0.9 0.2 -3.3 -6.4 -1.8 3.9
Inventories 1.0 0.7 -0.3 1.7 0.6 4.1 5.2
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