Durable Goods Orders Jump 9.2% In March, But One Category Tells The Real Story
U.S. durable goods orders jumped sharply in March, marking the biggest gain since July 2024, but the high single-digit headline spike hides a mixed picture that casts doubt on whether factory momentum was firing on all cylinders ahead of Trump's April 2 tariff move.
New orders for manufactured durable goods climbed by 9.2% to $315.7 billion in March, rising for a third consecutive month and far surpassing expectations for a modest 2% gain, according to data released Thursday by the U.S. Census Bureau.
The outcome marked the strongest increase in over eight months and the second-largest monthly gain over the past five years.
Transportation Orders Takes Off, But With A Caveat
Transportation equipment orders soared 27%, or $26.5 billion, to $124.6 billion, making it the single largest driver of the total gain.
Most of that, however, came from one specific category: nondefense aircraft and parts, which skyrocketed by a staggering 139% to $44.6 billion.
Stripping out the volatile transportation category, new durable goods orders were unchanged at $191.1 billion, a clear sign that underlying demand remains tepid.
Outside the transportation sector, capital goods orders stood out with a notable 24.3% increase to $127.2 billion, driven by a 29.4% surge in non-defense capital goods.
Where Is The Weakness?
Several other core manufacturing categories showed either minimal growth or outright contraction.
Computers and electronic products saw new orders slip 1.2% to $25.4 billion. Within that, computers and related products declined 2.9%, the steepest drop among all sub-categories.
Electrical equipment, appliances and components orders dipped 0.5%, while fabricated metal products barely moved, gaining just 0.2%.
Defense aircraft orders fell 9.4% to $5.6 billion, suggesting that recent DOGE-related spending cuts could be weighing on the Defense Department's procurement activity.
Market Reactions
The Dow Jones Industrial Average slipped 0.2% in premarket trading Thursday, following a 1% gain the previous day.
Boeing Co. (NYSE:BA), the biggest beneficiary of the aircraft orders jump, gave up 0.5% in early trading after climbing as much as 6% Wednesday.
Within blue-chip stocks, Salesforce Inc. (NASDAQ:CRM) rose 3.7% while Merck & Co. (NYSE:MRK) added 1.9%.
International Business Machines Corp. (NYSE:IBM) dropped 6% after weaker-than-expected guidance.
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