Durable Goods Orders Contract for Second Month

Despite reaching their highest level since March 2018, real durable goods new orders contracted 2.2% for the second consecutive month, indicating lower investment in production machinery ahead.

New orders for real durable goods in March totaled $280,110 million, which was the highest order level since March 2018. However, compared with one year ago, new orders contracted 2.2 percent for the second month in a row. These are the first months of contraction since June 2018. The annual rate of growth decelerated for the fifth month in a row, moving from 4.5% to 3.6%. This was the slowest rate of annual growth since November 2017.

New orders for motor vehicles and parts grew 3.8% in March compared with one year ago. The annual rate of growth accelerated slightly to 6.1%, but it is likely that the annual rate of growth will decelerate soon. 

Aerospace orders contracted 21.9%, contracting for the fifth time in six months. March was the first month that orders could have been affected by the news regarding Boeing’s 737 Max issues, so there may still be significantly more downside to aerospace orders in the months ahead. 

Accelerating Growth: HVAC, motor vehicle/parts, off-road/construction machinery

Decelerating Growth: computers/electronics, construction materials, durable goods, fabricated metal products, machinery/equipment, power generation, primary metals, total capital goods

Accelerating Contraction: aerospace, appliances, oil/gas-field/mining machinery

Decelerating Contraction: ship/boat building

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