New orders for manufactured durable goods in March increased $7.1 billion or 3.4 percent to $214.9 billion, the U.S. Census Bureau announced today. This was the fourth increase in the last five months and followed a 2.4 percent February increase. Excluding transportation, new orders increased 1.5 percent. Excluding defense, new orders increased 4.5 percent.
Orders for U.S. durable goods rose more than forecast in March, signaling business spending started to recover as the first quarter ended.
Orders for goods made to last several years increased 3.4 percent after a 2.4 percent gain in February that was larger than previously estimated, the Commerce Department said today in Washington. Orders excluding transportation equipment rose 1.5 percent after a 0.4 percent drop.
``We had been worried that businesses weren't confident enough to invest and this shows better confidence,'' said Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina. ``It's still too early to say manufacturing is completely on the mend, but this is a positive.''
Let's coordinated this data with a few other points.
According to the Federal Reserve's most recent Industrial Production release:
Output in the manufacturing sector moved up 0.7 percent in March; the increase was led by advances in the production of durable goods.
According to the same report, final products of consumer durables orders
1.) The 4th quarter 2005 - 2006 year-over-year comparison was a decrease of 2.5%
2.) The annual rate in the first quarter of 2007 was a 0% increase, and
3.) The March 2006 - March 2007 comparison was down 1.3%.
We also have the following numbers in the business equipment sector:
1.) The 4th quarter 2005 - 2006 year-over-year comparison was an increase of 9.7%
2.) The annual rate in the first quarter of 2007 was a -.5% decrease, and
3.) The March 2006 - March 2007 comparison was an increase of 7.4%.
In addition, we have the following comparisons in the final products of materials durable goods orders:
1.) The 4th quarter 2005 - 2006 year-over-year comparison was an increase of 5.6%%
2.) The annual rate in the first quarter of 2007 was a 2% increase, and
3.) The March 2006 - March 2007 comparison was up 3.6%.
The materials orders are twice the size of the consumers durables -- 19.15% versus 7.16%. The materials orders are twice the size of the consumers durables -- 19.15% versus 9.95%.
At the same time, we have the following chart from Martin Capital: