After reporting a bigger than expected increase in new orders for U.S. manufactured durable goods in the previous month, the Commerce Department released a report on Thursday that once again showed stronger than expected durable goods orders growth in the month of March.
The report said durable goods orders surged up by 2.6 percent in March after jumping by a revised 2.1 percent in February.
Economists had expected orders to climb by 2.0 percent compared to the 2.2 percent increase that had been reported for the previous month.
The increase in durable goods orders was partly due to continued growth in orders for transportation equipment, which increased by 4.0 percent in March after surging up by 6.7 percent in February.
However, excluding the increase in orders for transportation equipment, durable goods orders still increased by 2.0 percent in March compared to a 0.1 percent uptick in February.
The jump in ex-transportation orders was the biggest monthly increase since January of 2013 and far exceeded economist estimates for 0.9 percent growth.
Orders for computers and electronic products shot up by 5.7 percent, while orders for electrical equipment, appliances, and components jumped by 3.5 percent.
The report also showed notable increases in orders for primary metals and fabricated metal products as well as a modest rebound in orders for machinery.
Additionally, the Commerce Department said orders for non-defense capital goods excluding aircraft, an indicator of business spending, rebounded by 2.2 percent in March after falling by 1.1 percent in February.
Peter Boockvar, managing director at the Lindsey Group, said, "Outside of income growth, capital spending has been the key missing link to a faster growth picture and we certainly saw a nice bounce back in March off the tough winter."
"The sustainability becomes the next big question and whether we'll just go back to trend pre-winter or whether we're on the cusp of a new leg higher," he added.
The report said shipments of non-defense capital goods excluding aircraft, which get plugged into GDP, rose by 1.0 percent in March following a 0.7 percent increase in February.
Next Friday, the Commerce Department is scheduled to release a separate report on factory orders in the month of March. The report includes data on orders for both durable and non-durable goods.
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