U.S. headline durable goods orders rise strongly in March

U.S. headline durable goods orders grew strongly in March, coming in above consensus expectations. Durable goods orders grew 2.6 percent sequentially, as compared with consensus expectations of 1.6 percent. Moreover, the February print was upwardly revised by three-tenths at the headline level, but the core level was downwardly revised by one-tenth. The sharp rise in orders was mainly driven by volatility in non-defense orders, especially aircraft orders, which recorded solid growth for the second consecutive month.

Excluding transportation, durable goods orders rose modestly by 0.5 percent sequentially. However, at the core level orders fell by one-tenth on the month, in line with our outlook for a modest decline. Orders for computers & electronics recovered by 1.3 percent sequentially, and orders for primary metals rose 1.4 percent. But machinery orders dropped 1.7 percent. The shipments side of the report reflects a similar story: capital goods shipments rose 1.6 percent sequentially, driven by nondefense aircraft shipments, while core shipments dropped 0.7 percent, noted Barclays in a research report.

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