Alarm bells were sounded as to the health of the U.S. economic recovery.
Figures released this morning in Washington show that new orders for durable goods fell 5.7% in March, more-than-retracing the sizable 4.3% (was 5.6%) jump in February. Weakness in March was largely concentrated in an outsized 48.2% plunge in the volatile non-defense aircraft component that followed an 86.4% surge in the previous month.
Motor vehicle orders rose for the fifth consecutive month in March, up 0.2%, however, this provided on a small offset to the weakness in aircraft orders and the transportation component was down 15.0% following the 20.0% jump in February. Weakness was evident among other components as well, as orders excluding transportation fell 1.4% in March.
Orders of non-defense capital goods excluding aircraft, a commonly used leading indicator of future business capital investment, however, rose 0.2% following a 4.8% drop in February (initially reported as -3.2%). Despite the softness in orders in February and March, the 6.7% surge in the component in January provided a solid hand-off to the quarter and the average of the measure for the first quarter of 2013 was an annualized 16.7% above its average for the last quarter of 2012.
Shipments of durable goods rose 0.4% in March following a revised 0.7% increase (was +1.0%) in February. Shipments of non-defense capital goods excluding aircraft, which enters directly into the Bureau of Economic Analysis’s quarterly estimate of business capital spending, rose 0.3% in March to build on the 1.2% increase (revised from +1.9%) in the previous month. As well, inventories of durable goods rose 0.1% following gains of 0.4% in both February and January.
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