U.S. durable goods order likely slowed in March

U.S. durable goods had risen strongly in February by 3 percent, indicating that business investment is still alive and well after soft beginning to the year. Core orders rose 1.4 percent following two straight months of declines.

The rebound in this measure of business investment and industrial production in February put hard data from the factory sector closer consistent with the elevated survey measures and likely helped assuage some worry that the factory revival was losing traction even with tax cut euphoria, noted Wells Fargo in a research report.

The uptick in February has certainly rebounded the outlook for first quarter business investment in GDP. But even with the improvement, it is not expected to see three straight quarters of double-digit growth. Durable goods orders are likely to have risen 1.6 percent in March.

“We have penciled in a respectable 6.6 percent increase in equipment spending in Q1 with the sector growing 8.0 percent in 2018 as a whole. Tax cuts are still a tailwind for the sector”, added Wells Fargo.

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