Aircraft sales drive rebound in US durable goods in March
Published: 05:06 PM, 26 April 2019
Sales of US-made manufactured goods unexpectedly surged to a six-month high in March, rising on strong demand for aircraft and communications equipment along with record auto sales, the government reported Thursday.
The gains in aircraft orders came despite the travails of US aviation giant Boeing, which has suspended deliveries and slowed production of its top-selling 737 MAX aircraft following two deadly crashes.
The jump in sales of big-ticket manufactured items should bolster GDP growth in the third quarter and came with a slight upward revision to February when the decline was not as deep as originally reported.
Total orders for US durable goods soared 2.7 percent to $258.5 billion for the month, handily surpassing the 0.9 percent gain economists had been expecting, Commerce Department data showed.
For February, the 1.6 percent decrease was recalculated to show a slightly improved 1.1 percent drop.
The result put the first quarter of 2019 up to three percent over the same period last year.
Orders for civilian aircraft jumped 31.2 percent in March, more than making up for February’s losses, and suggesting demand for American-made aircraft remains strong despite the crisis facing Boeing.
And after two weak months, sales of autos and parts rose 2.1 percent ahead of the summer driving season, hitting their highest level since records began in 1992 at $63.1 billion.
Excluding the volatile transportation sector, durable goods sales rose by a more modest 0.4 percent, which was still stronger than expected and reversed losses from prior months.
Computers, fabricated and primary metals all fell, according to the report.
But sales of civilian capital goods not including aircraft — a closely watched proxy for business investment — rose 1.3 percent, putting it up for a third straight month.
Meanwhile, communications equipment jumped 8.9 percent, the biggest one-month increase in more than four years, with purchases hitting their highest level since March 2001 at $3.9 billion.
Ian Shepherdson of Pantheon Macroeconomics said the rise in capital goods sales was “hard to square” with recent declines in an index for manufacturing activity.
“The jump in orders could easily be revised down substantially but for now it is a very welcome surprise, adding to the evidence that the manufacturing downturn is coming to an end, a bit sooner than we had anticipated,” he said in a client note.
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