Durable Goods Report Optimistic, But Analysts Remain Pessimistic On Economic Outlook

According to the Census Bureau report, new orders were up 3.4 percent, and most other markers were positive, but some still worry.

WASHINGTON, D.C.- In March, new orders for manufactured durable goods increased 3.4 percent to $214.9 billion, according to a report released by the U.S. Census Bureau on Wednesday.

(For more information, click here.)

After decreasing for the past two months, shipments increased 0.8 percent in March to $207.8 billion.

Unfilled orders, which had increased 22 of the past 23 months, rose again in March, moving up 1.8 percent to $717 billion. This increase marks the highest level since 1992.

Inventories continued a 13-month trend and increased 0.3 percent in March to $298.8 billion.

Nondefense new orders for capital goods were up 11.7 percent to $80.2 billion. Defense new orders for capital goods dropped 22.4 percent to $6.3 billion.

 “The significant bounce back in business equipment spending evidenced in the durable goods report is more a function of the volatility inherent in these data than a clear sign that business confidence in the economy has stabilized enough to allow capital spending to resume a healthy growth trajectory after weakening considerably in the latter months of 2006,” said Cliff Waldman, Economist for the Manufacturers Alliance/MAPI.  “The general economic outlook remains precarious.  Weather-related volatility aside, there is mounting evidence that the housing slump is worsening.  And while consumer spending has been supported by moderately strong job growth, the continuation of sluggish GDP growth puts the labor market at risk, as well. 

“Healthy export demand should allow for continued expansion in the factory sector, albeit at a subdued pace,” he added.  “But the outlook for the domestic U.S. economy remains a considerable question mark.”


More in Operations