After February’s plunge, analysts expected preliminary March data to show a modest rebound in durable goods orders and they were right in direction but not in magnitude. Flash March Durable Goods Orders rose 0.8% MoM (from an upwardly reviused -1.7% MoM in February)
On a year-over-year basis, Durable Goods Orders growth rose 9.9% – its slowest since Feb 2021.
While the headline ‘missed’ (thanks to the revisions), the Ex-Transports print spanked expectations, rising 1.1% MoM (against a +0.6% MoM expectation).
Finally, the value of core capital goods orders – a proxy for investment in equipment that excludes aircraft and military hardware – rose by a larger-than-forecast 1%.
Notably the data was impacted (negatively) by a huge drop in Defense Aircraft spending (in March)…
The figures suggest sustained momentum in capital expenditures as the first quarter drew to a close… but how long will that last as The Fed embarks on its most aggressive tightening cycle ever (and remember this is ‘old’ data – so think of the rebound in war spending to come).