US durable goods orders plummet amid lower demand for jets and autoomobiles

According to the Department of Commerce, in seasonally adjusted terms, orders for durable goods shrank by an outsized 14.4% month-on-month in March to reach an annualised pace of $213.18bn.

That compared to a 11.1% decline anticipated by economists.

The decline was nearly completely accounted for by the 41% slide in orders for transportation equipment to $51.24bn.

Orders for motor vehicles and parts dropped by 18.4% to $49.0bn, while those for civilian aircraft and parts were 296% lower at -$16.34bn.

Conspicuous however was a 0.1% on the month increase (consensus: -3.3%) in orders for capital goods excluding civilian aircraft and defence, often considered a lead indicator of true underlying investment demand, to $68.9bn.

"The March numbers were better than we expected; presumably, it takes a bit of time for management decisions to cut spending to filter into the hard numbers," said Ian Shepherdson at Pantheon Macroeconomics.

"The pre-Covid trend in core capital goods orders was flat, following a year of minimal earnings growth, though we were beginning to look for an improvement in the spring. That’s not happening; instead, we expect April core capex orders to crater, falling perhaps 20-to-30%. The worst month after the crash of 2008 was -11.1% in January 2009."