WASHINGTON — The latest U.S. durables orders report was better than expectations but weak beneath the surface, suggesting underlying manufacturing conditions remain soft.
March durable goods orders posted a 4.0% increase and now are up in two of the three months of the first quarter. But ex-transportation orders posted a 0.2% decline in a sixth monthly drop, illustrating that manufacturing gains are concentrated in a few industries.
Ex-defense orders posted a 2.6% rise.
The March orders gain was due to autos at a 5.4% increase and civilian aircraft at a 30.6% gain. But the Boeing Corp. reported 39 new orders, down from 72 in February. Seasonal adjustment removed about $1.2 billion of a $9 billion unadjusted surge in airplane orders that is at odds with the raw Boeing data.
Excluding civilian aircraft, there have been seven consecutive months of drops in durables orders through March.
Elsewhere, primary metals orders posted a 0.2% slide, machinery fell 1.5%, electronics declined 1.1%, and communications equipment dropped 5.3% for the month. These show weakness.
So overall this is a poor report despite the headline surge that followed -1.4% in February. At best orders are seesawing since December.
To round out the data, shipments were up 1.1% and inventories up 0.1%. Inventories appear to have dipped over the course of Q1.
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