Durable Goods Orders for March 2010

Released on 4/23/2010 8:30:00 AM For Mar, 2010 Prior Consensus Consensus Range Actual New Orders - M/M change 0.5 % 0.4 % -0.8 % to 2.5 % -1.3 % New Orders - Yr/Yr Change 11.9 % Ex-transportation - M/M 0.9 % 2.8 % Ex-transportation - Yr/Yr 13.5 %

Highlights Aircraft orders pulled down the headline number but otherwise, durable orders look great. New orders for durable goods in March dipped 1.3 percent after gaining a revised 1.1 percent in February. The headline number came in well below market forecasts for a 0.4 percent rise. Excluding the transportation component, however, new durables orders spiked 2.8 percent, following a revised 1.7 percent rebound in February. Transportation fell 12.9 percent in March with civilian aircraft leading the decline, decreasing a monthly 99.5 percent. Outside of transportation, gains were widespread. On the upside were primary metals, up 3.5 percent; machinery, up 8.6 percent; electrical equipment, up 4.9 percent; and "other" durables, up 0.1 percent. In addition to transportation, fabricated metals decreased-by 1.2 percent. Nondefense capital goods orders excluding aircraft gained another 4.0 percent in March, following a 2.1 increase the month before. Shipments for this category-and source data for equipment investment in GDP-rose 2.2 percent in February, following a 1.5 percent increase the month before. Year-on-year, overall new orders for durable goods in March were up 11.9, compared to 11.4 percent in February. Excluding transportation, new durables orders improved to 13.5 percent from 8.5 percent in February. On the release of the report, equity futures and Treasury rates firmed.

Market Consensus Before Announcement Durable goods orders in February gained a revised 0.9 percent, following a revised 3.8 percent surge in January. New orders have been up three months in a row. Excluding the transportation, new durables orders rebounded 1.4 percent, following a 0.8 percent decline in January. Looking ahead, recent manufacturing surveys were mixed on new orders. The ISM durables index spiked to 62.3 for March from 55.0 the prior month (breakeven of 50) and the Empire State survey's new orders index jumped to 25.43 from 8.78 in February. In contrast, the Philly Fed new orders index eased to a less positive 9.3 from 22.7 in February. The two regional surveys have a breakeven point at zero.

Definition Durable goods orders reflect the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. The first release, the advance, provides an early estimate of durable goods orders. About two weeks later, more complete and revised data are available in the factory orders report. The data for the previous month are usually revised a second time upon the release of the new month's data.  Why Investors Care

Monthly fluctuations in durable goods orders are frequent and large and skew the underlying trend in the data. In fact, even the yearly change must be viewed carefully because of the volatility in this series. Data Source: Haver Analytics