U.S. March Durable Goods Orders - Aircraft surge, ex transport subdued, Initial Claims still low
March durable goods orders have risen by an exceptional 9.2%, though an unchanged ex transport figure suggests a subdued underlying picture. The transport rise was led by aircraft, though autos also increased. Initial claims rose to 222k from 216k, but remain consistent with a healthy labor market.
The initial claims 4-week average is the lowest since February 15. The latest data covers the week after that in which April’s non-farm payroll was surveyed.
Continued claims cover the payroll survey week, and fell by 37k to 1.864m after a 34k increase in the preceding week. The last eight weeks have seen moves in alternating directions of similar magnitude. Trend looks fairly flat.
The surge in aircraft orders is probably erratic rather than an attempt to beat tariffs, with Boeing still in recovery from last year’s strike. Gains in autos are probably however pre-tariff. The autos rise of 2.3% was not dramatic. Civil aircraft surged by 139.0% while defense fell. Ex defense orders rose by 10.4%.
The flat ex transport figure follows an above trend 0.7% increase in February. Trend is stable around 0.2% per month.
Non-defense capital orders with a 0.1% rise were similarly subdued, while shipments in the sector rose by a moderate 0.3%. With inventories up by only 0.1%, there is no reason to upgrade Q1 GDP forecasts.
