US durable goods orders strong in March outside of civilian aircraft

Orders in the US for goods made to last more than three years fell short of market expectations last month, but only as a result of weakness in the often volatile category of civilian aircraft.

According to the Department of Commerce, so-called durable goods orders grew at a month-on-month pace of 0.5% to reach $256.32bn.

Economists had penciled-in an increase of 1.2%.

However, excluding the transportation sector, orders were up by 1.6% on the month to reach $174.5bn, as expected by economists.

Orders for non-defence aircraft and parts on the other hand nearly halved, shrinking by 46.9% to $5.1bn.

So-called core capital goods orders, a closely-followed lead indicator for business investment, rose by 0.9% versus February to reach $75.9bn (consensus: 1.5%).

Included among capital goods industries were those for small arms and ordnance, as well as machinery and equipment for a wide range of industries, from agriculture to telecommunications.

Total durable goods orders for February were revised higher to show a fall of 0.9%, versus a preliminary estimate of a 1.2% decline.

Jonathan Millar and Pooja Sriram at Barclays Research labeled Monday's report as "good".

"In our view, the sharp rebound in ex-transportation durable goods orders verifies that February's weakness was weather-related," they said in a research note sent to clients.

On the back of the same report they also bumped up their tracking estimate for first quarter US GDP growth by three tenths of a percentage point to 5.6%.

The US Department of Commerce was scheduled to publish its preliminary reading on first quarter US GDP on 29 April.