Preview: Due March 26 - U.S. February Durable Goods Orders - Ex transport to rise but may be difficult to sustain
We expect February durable goods orders to be unchanged overall but with an above trend 0.5% increase ex transport. The manufacturing picture has recently been showing signs of improvement but that will be difficult to sustain if a trade war escalates.
We expect transport to fall by 1.0% as weaker Boeing orders outweigh a bounce in autos. We expect a modest increase in defense capital orders after four straight declines, with orders ex defense to fall by a marginal 0.1%.
An above trend increase ex transport after a flat January will reflect feed through of positive January ISM manufacturing data. While February ISM data was less impressive, February’s industrial production production report showed an improving manufacturing picture.
We expect non-defense capital orders ex aircraft, a key indicator of business investment, to rise by 0.2%, underperforming the ex transport series after January outperformed with a 0.8% increase.
