U.S. durable goods orders up solid 2.7% in March
WASHINGTON — Orders to U.S. factories for big-ticket manufactured goods rose 2.7% in March with a key category that tracks business investment decisions rising at the strongest pace in eight months.
The increase in orders for durable goods followed a 1.1% drop in orders in February, the Commerce Department reported Thursday. Both months were influenced by a swing in the volatile category of commercial aircraft, which had fallen sharply in February and rebounded in March.
The closely watched category that serves as a proxy for business investment saw a 1.3% rise in orders in March, the best showing since a 1.5% increase last July.
Economists are hoping that manufacturing, which has been battered by global weakness and trade tensions, will begin showing strength in coming months which will provide support for the overall economy.
The government will provide its first look at overall economic growth, as measured by the gross domestic product, on Friday. Economists have been upgrading their estimates for first quarter growth with many now thinking the GDP expanded at an annual rate of close to 3% in the first three months of the year, up a full percentage point from their previous estimates. Several economic reports in recent weeks have shown new-found strength.
A separate report Thursday showed that the number of Americans filing applications for unemployment benefits, a proxy for layoffs, jumped 37,000 to a still-low 230,000 last week. Claims had declined for five straight weeks, falling to a near 50-year low of 193,000 the week of April 13. Analysts attributed last week’s big jump in benefit applications to trouble seasonally adjusting the numbers around spring holidays such as Easter and Passover, which occur at different times each year.
The report on durable goods orders showed the 2.7% March gain was the best showing since a 4.7% jump last August.
The 1.3% rise in the investment category followed a tiny 0.1% gain in February and a 0.9% January advance.
Demand for commercial aircraft surged 31.2% in March, rebounding from a 25.4% plunge in February. Shipments of commercial aircraft, however, fell by 0.4% in March. Shipments of Boeing’s 737 MAX have been suspended while authorities investigate the cause of two deadly crashes of the plane.
Orders for machinery fell 0.7% in March but demand for communications equipment surged 9%, the biggest advance in more than four years.