Instant View: Durable goods fall 1.3 percent in March

NEW YORK (BestGrowthStock) – New orders for long-lasting U.S. manufactured goods unexpectedly dropped in March as civilian aircraft bookings plunged, but recorded their largest gain in more than two years excluding transportation, government data showed on Friday.

KEY POINTS: * The Commerce Department said durable goods orders fell 1.3 percent, the biggest drop since August, following an upwardly revised 1.1 percent gain February. * Analysts polled by Reuters had forecast a rise of 0.3 percent from February’s previously reported 0.9 percent increase. * New durable goods orders excluding transportation jumped 2.8 percent last month, the largest rise since December 2007, after increasing 1.7 percent in February. * Analysts polled by Reuters had expected new orders excluding transportation to rise 0.7 percent.

COMMENTS:

ZACH PANDL, ECONOMIST, NOMURA SECURITIES INTERNATIONAL, NEW YORK:

“The capex recovery is running at full speed. Firms are becoming increasingly confident in investing in capital goods. The fact is companies seem confident that growth in final demand will be sustained.

“The headline number fell short of forecasts, but the parts of the report that really matter support the case of above trend growth in the quarter. We are looking at 3.5 percent growth for Q2.”

RICHARD LEE, MANAGING DIRECTOR, FIXED INCOME, WALL STREET ACCESS, NEW YORK:

“It’s a trend a lot of people are looking for that things have bottomed. Based on overseas demand especially in Asia, people are bullish that things are picking up. There is a lot of optimism out there.”

MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON, NEW YORK:

“You have to read the tea leaves on this report because there are a lot of moving parts. And this is a stronger report than it seemed at first blush. Certainly the upward revisions to the prior month on the headline number can’t be ignored. Also, if you strip out transportation, which is always volatile, this report was out of the ballpark — 2.8 percent. That’s on expectations of 0.7 percent. And we had a doubling of the prior month. So that’s really where most analysts and the market will focus. These are some large numbers. We’re looking for something between 3.5 percent and 4 percent on first-quarter GDP due out next week. I think the market can go into the weekend comfortable that the U.S. recovery is still going full swing.”

WARD MCCARTHY, CHIEF FINANCIAL ECONOMIST, JEFFERIES & CO, NEW YORK:

“It’s one of these numbers that at first blush looks really weak. You take a second look at it and there’s some muscle in there.”

MARKET REACTION: STOCKS: U.S. stock index futures add small gains after durable goods data. BONDS: U.S. Treasury debt prices extend losses.

DOLLAR: U.S. dollar extends gains versus yen, rises versus euro.

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Instant View: Durable goods fall 1.3 percent in March