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Aircraft sales drive rebound in US durable goods in March
WASHINGTON, April 26, 2019 (BSS/AFP) – Sales of US-made manufactured goods
unexpectedly surged to a six-month high in March, rising on strong demand for
aircraft and communications equipment along with record auto sales, the
government reported Thursday.
The gains in aircraft orders came despite the travails of US aviation
giant Boeing, which has suspended deliveries and slowed production of its
top-selling 737 MAX aircraft following two deadly crashes.
The jump in sales of big-ticket manufactured items should bolster GDP
growth in the third quarter and came with a slight upward revision to
February, when the decline was not as deep as originally reported.
Total orders for US durable goods soared 2.7 percent to $258.5 billion for
the month, handily surpassing the 0.9 percent gain economists had been
expecting, Commerce Department data showed.
For February, the 1.6 percent decrease was recalculated to show a slightly
improved 1.1 percent drop.
The result put the first quarter of 2019 up three percent over the same
period last year.
Orders for civilian aircraft jumped 31.2 percent in March, more than
making up for February’s losses, and suggesting demand for American-made
aircraft remains strong despite the crisis facing Boeing.
And after two weak months, sales of autos and parts rose 2.1 percent ahead
of the summer driving season, hitting their highest level since records began
in 1992 at $63.1 billion.
Excluding the volatile transportation sector, durable goods sales rose by
a more modest 0.4 percent, which was still stronger than expected and
reversed losses from prior months.
Computers, fabricated and primary metals all fell, according to the
report.
But sales of civilian capital goods not including aircraft — a closely
watched proxy for business investment — rose 1.3 percent, putting it up for
a third straight month.
Meanwhile, communications equipment jumped 8.9 percent, the biggest one-
month increase in more than four years, with purchases hitting their highest
level since March 2001 at $3.9 billion.
Ian Shepherdson of Pantheon Macroeconomics said the rise in capital goods
sales was “hard to square” with recent declines in an index for manufacturing
activity.
“The jump in orders could easily be revised down substantially but for now
it is a very welcome surprise, adding to the evidence that the manufacturing
downturn is coming to an end, a bit sooner than we had anticipated,” he said
in a client note.
BSS/AFP/HR/0945