Source: Wall Street News
By category, orders for non-defense aircraft soared more than 30% month-on-month, and computer-related orders plummeted 3.9% month-on-month, the biggest decline since mid-2020.
US commercial equipment orders rose slightly in March, indicating that companies were cautious about demand prospects and curtailed investment.
On Wednesday, April 24, the US Department of Commerce released data showing that US durable goods orders in March increased 2.6% from the initial value, better than market expectations. Compared with the sharp recovery from the previous value, the previous value was further lowered from 1.3% to 0.7%. This is the eighth decline since last year. On a year-on-year basis, orders for durable goods fell by 2.2%, the biggest drop since the pandemic.
US core capital goods orders in March — orders for non-defense durable goods excluding aircraft increased only slightly by 0.2% compared to March, in line with market expectations. The previous value was revised down from 0.7% to 0.4%. The year-on-year decline was 1.2%, the biggest year-on-year decline since the outbreak began. The core capital goods order data is closely watched by the market because it measures business expenditure plans.
The analysis points out that the increase in orders for core capital goods for the second year in a row indicates that equipment investment has stabilized, but equipment investment dragged down GDP in four of the past five quarters. This shows that companies are cautious about capital expenditure, but there are still some companies that seek to increase productivity in the face of rising investment costs.
The preliminary value of the US GDP for the first quarter will be announced on Thursday. Ahead of the durable goods report, the Atlanta Federal Reserve's GDPNow forecast showed a slight decline in commercial equipment spending this quarter.
The industry did not fluctuate much after the data was released. The rise of the US stock index increased slightly, and the pre-market increase of NASDAQ 100 futures extended to 0.8%. The US 10-year Treasury yield rose 2 bps in the short term to 4.651%.
Non-defense aircraft orders soared, computer-related orders plummeted month-on-month
Orders for both defense and non-defense capital goods increased, with orders for non-defense aircraft soaring more than 30% month-on-month.
According to a report from the US Department of Commerce, commercial aircraft bookings, which fluctuate a lot each month, soared by nearly 31%, about double the February increase. Boeing announced that the number of orders in March was 113, far higher than the 15 in February.
Orders excluding durable goods for transportation increased 0.2% month-on-month in March, in line with the expected value. The year-on-year increase was 1.3%, and the previous value was revised down from 0.3% to 0.1%.
The AI bubble appears to be bursting, and orders for computers and related products plummeted 3.9% month-on-month, the biggest drop since mid-2020.
A recent PMI survey indicates that the US manufacturing industry is mixed. The Institute for Supply Management's manufacturing indicators earlier this month showed that factory activity expanded for the first time in March since September 2022, while the initial S&P PMI for April contracted for the first time in four months.
edit/lambor