Long-term manufactured goods orders jumped in March, far surpassing expectations and built on previous profits, according to data released Thursday by the U.S. Census Bureau.
New orders for durable products rose 9.2% to seasonally adjusted $315.7 billion after a 0.9% increase in February. Economists had predicted a more conservative 1.4% increase. This profit was driven by a 27.0% surge in transport equipment and led to a 139.0% jump in commercial aircraft orders, which alone accounted for an overall headline increase.
Excluding transportation, orders remained flat compared to expectations for a 0.7% increase and 0.3% increase in February. Core Capital Goods Orders – non-escaping capital goods except aircraft, proxies that are closely monitored for private sector investments – are slower than 0.7% in February and below the forecasted 0.3%.
Machine orders rose 0.1%, down from the previous month’s 0.8% increase, while cargo rose 0.5%. Computers and related products fell 2.9% in orders following a 0.9% increase in February. Auto and parts orders rose 2.3%, reflecting the previous month’s pace. Primary metal orders rose 0.7%, slowing down from the 1.3% increase in February.
All durable goods shipments rose 0.1% in March after a 1.3% increase in February. Unreleased orders rose 2.0% compared to just 0.1% in the previous month, with transport accounting for most of the increase.
The shipments of core capital goods used to calculate the equipment investment component of GDP were measured conservatively in March, suggesting that business investments could recover in the first quarter following the contract later last year.
Many analysts and media reports explain the surge in front-loading orders ahead of the tariff announcement in early April, but suggest that companies are not stocking up large stockpiles in anticipation of higher import costs as the inventory of durable goods only rose 0.1%. Inventories of non-evacuated capital goods increased by 0.3%, and inventory of total capital goods increased by 0.4%. This is an increase benefit, but is consistent with a careful replenishment environment.
Durable product orders are considered a key indicator of economic strength. When businesses and consumers commit to purchasing long-lived products, such as machinery, vehicles, and appliances, they express confidence in their future revenue and stability. These are not impulsive purchases. They are betting on the future. The sustained rise in durable product orders is not just a sign that the factory is busy, but a signal that economic momentum is being built.
More comprehensive data including non-durable items will be released on May 2nd.
