US Durable Goods Orders: Not as good as the headline suggests – Wells Fargo
Data released on Wednesday in the US showed that Durable Goods Orders rose 3.2% in March surpassing expectations. Analysts at Wells Fargo point out the increase was due almost entirely to a surge in aircraft orders. They argue that private-sector core capital goods orders is what matters and are showing a continued reversal in demand.
Key quotes:
“Look through the headline durable goods data that suggest orders leaped 3.2% in March. The gain last month was due almost entirely to a pop in aircraft orders specifically after weakness in the first two months of the year. It’s not unusual to get wide swings in aircraft orders month-to-month.”
“The trend in private-sector core orders has slowed and suggests the goods sector of the economy still appears to be going through correction as new demand slows amid increased economic uncertainty. Core durable goods orders (excluding defense and aircraft), slid 0.4% in March, marking the fifth decline in seven months.”