Durable Goods Orders
I’m not a regular follower of durable goods orders, and I don’t generally pay much attention to whether it goes up or down in any particular month. This morning’s release was slightly more eye-catching than usual, however; durable goods orders have now fallen for three consecutive months, which starts to look more like a trend than temporary variation…
WASHINGTON (Reuters) – New orders for long-lasting U.S.-made goods plunged unexpectedly in March, the biggest drop since September 2002, the government said Wednesday.
A sharp drop in orders for aircraft pushed new orders down by 2.8 percent, the Commerce Department said. Excluding the volatile transportation category, orders for durable goods — pricey manufactured items meant to last three years or more — sank 1 percent, the department said. Revisions moved the previous months’ reading lower as well. Commerce adjusted the February durable goods orders down to a 0.2 percent decline from a 0.5 percent increase, and revised the durable goods orders ex-transportation lower to a 0.2 percent drop from unchanged.
The report offered a generally gloomy picture for factory and business spending plans. Wall Street economists had expected durable goods orders to climb 0.3 percent overall and 0.5 percent excluding transportation. The total level of new orders was at its lowest since June 2004. Durable goods orders excluding defense fell 3 percent, the biggest drop since September 2002.
Orders for durable goods are probably more of a leading indicator than a coincident indicator, but nevertheless, I’m starting to suspect that the estimate of first quarter GDP growth (due out tomorrow) could be lower than the average guess of around 3.5%…