Durable-goods orders rose in March, reversing a February decline, but falling below economists’ expectations as weakness in the volatile aircraft and transportation categories weighed.
New orders for durable goods, or items meant to last at least three years, rose a seasonally adjusted 0.5% in March from February’s 0.9% decline, the Commerce Department said Monday. Economists polled by the Wall Street Journal had expected a 2.2% gain on the month.
The numbers look better when the weakness in aircraft and transportation is stripped out. Core orders, excluding aircraft and defense products, rose 0.9% in March from February. Orders excluding transportation, another volatile category, rose 1.6% in March.
Digging deeper, some economists see growing demand for industrial goods like machinery and metals as factories scramble to meet increasing demand as the pandemic subsides.
“Industrial spending had lagged, but is quickly catching up,” wrote Jefferies economists Thomas Simons and Aneta Markowska. “The rotation from tech to industrial capex is likely to continue well into 2021, supported by the reopening of the economy and one of the largest restocking cycles on record. We expect inventory building to continue thorough much of this year, now that fiscal stimulus has created another wave of spending on consumer goods.”
Stocks were higher in early trading. The Dow Jones Industrial Average was up 0.2% at 34,099, the S&P 500 was up 0.2% at 4187, and the Nasdaq Composite was up 0.2% at 14,042.
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April 26, 2021 at 09:19PM
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Durable-Goods Orders Look Soft but Economists See Underlying Signs of Strength - Barron's
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