Reflecting another jump in orders for transportation equipment, the Commerce Department released a report on Thursday showing a bigger than expected increase in new orders for U.S. manufactured durable goods in the month of March.
The Commerce Department said durable goods orders surged up by 2.6 percent in March after spiking by an upwardly revised 3.5 percent in February.
Economists had expected durable goods orders to climb by 1.6 percent compared to the 3.0 percent jump that had been reported for the previous month.
The bigger than expected increase in durable goods orders came as orders for transportation equipment shot up by 7.6 percent in March following an 8.9 percent leap in February.
Orders for non-defense aircraft and parts showed another substantial increase, soaring by 44.5 percent in March after spiking by 39.1 percent in the previous month.
Excluding the skyrocketing orders for transportation equipment, however, durable goods orders came in unchanged in March compared to a 0.9 percent increase in February. Ex-transportation orders had been expected to rise by 0.5 percent.
Notable increases in orders for primary metals and computers and electronic products were offset by a steep drop in orders for machinery.
The report also said orders for non-defense capital goods excluding aircraft, an indicator of business spending, edged down by 0.1 percent in March after climbing by 0.9 percent in February.
Michael Pearce, Senior U.S. Economist at Capital Economics, noted shipments of goods in the same category expanded by just 4.1 percent in the first quarter.
“That points to a similar-sized gain in business equipment investment, which had been growing at a double-digit pace over the previous two quarters,” Pearce said. “That could be a sign that the surge in market interest rates over the past six months is already taking a toll on the economy.”
He added, “Nonetheless, we still expect investment growth to pick up over the rest of the year, as tax cuts boost domestic demand and capacity constrains bite.”
The Commerce Department said shipments of durable goods rose by 0.3 percent in March after climbing by 0.7 percent in February.