Durable-Goods Orders Rise a Surprising 2.6%
Orders for big-ticket goods in March posted their first increase this year after two months of decline, providing fresh evidence of an economy hot enough to force another increase in interest rates.
Orders for durable goods--items expected to last at least three years--rose a greater-than-expected 2.6% last month to a seasonally adjusted annual rate of $215.2 billion, led by a heavy demand for electronic products. That reversed the pattern of the two previous months in which orders declined, the Commerce Department said Wednesday.
Orders for electronics and electrical equipment, including semiconductors, circuit boards and home appliances, soared 9.7%, the eighth increase in the last 10 months and the biggest jump since November.
“This tells the story of the technology wave that is helping to fuel economic growth,” said Michael Niemira, an economist with the Bank of Tokyo-Mitsubishi.
Total durable-goods orders fell by 1.9% in January and 2% in February.
Even with those declines, durable-goods orders were up 7.4% in the first quarter of 2000 from the same period last year.
“If the Fed is looking for signs of moderation, they won’t find it here,” First Union chief economist David Orr said of Wednesday’s durable-goods report.
Orders for transportation equipment grew by a solid 1.8% as an increase in orders for cars and automobile parts more than offset a decrease in shipbuilding and tanks.
Excluding the volatile transportation category, total durable-goods orders rose 2.8% in March, the largest increase since July.
Orders for industrial machinery, including computers and machine tools, fell 2.1% in March after a 3.8% decline the month before. Those orders have been down four of the last five months.
Separately, the booming economy has helped push the nation’s homeownership rate to an all-time high of 67.1% in the first quarter of this year, surpassing the previous record of 67% set in the third quarter of 1999, the Housing and Urban Development Department said in a report.
