New orders for U.S. durable goods fell at the fastest rate in several years in the month of March, according to figures released Wednesday by the Commerce Department.
Advance estimates of new durable goods orders for the month came in at $202.6 billion, a 4.2 percent decrease from February levels. The drop reflected the largest monthly decline since January of 2009.
Most economists had expected durable goods orders to fall from February levels but generally expected a much less severe drop of around 1.5 percent.
The vast majority of the decline in durable goods orders can be traced to the transportation sector and specifically to orders for civilian aircraft and parts.
Overall orders for transportation equipment tumbled by 12.5 percent, with orders in the often extremely volatile civilian aircraft sector down by 47.6 percent.
Excluding the steep drop in orders for transportation equipment, durable goods orders fell by a more modest 1.1 percent in March compared to a 1.9 percent increase in February.
Notable decreases in orders for machinery, primary metals, and computers and electronic products contributed to the drop in ex-transportation orders.
The report also showed that orders for non-defense capital goods, excluding aircraft, which are seen as an indicator of business spending, fell by 0.8 percent in March after surging up by 2.8 percent in February.
Jennifer Lee, senior economist at BMO Capital Markets, said the drop in core orders suggests that businesses are holding back despite being armed with strong balance sheets.
The Commerce Department also said that shipments of durable goods rose by 1.0 percent in March, while inventories of durable goods increased by 0.4 percent.
by RTT Staff Writer
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