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First Cut: New orders for durable goods rise sharply in March on transportation

The advance report on new orders for durable goods rose 2.7% in March from February, overtaking the 1.1% decline in the prior month (previously down 1.6%). The gain was in large part due to a 7.0% increase in the transportation component powered by sharp gains for nondefense aircraft (up 31.2%) and defense aircraft (up 17.7%). Motor vehicles contributed a 2.1% increase in March.

The headline was well above expectations and should help improve the outlook for the manufacturing sector in the first quarter.

Even excluding the transportation component, orders were up 0.4%, an increase that was mixed across other components.

Core new orders — orders excluding civilian aircraft capital goods and defense capital goods — was up 0.8% in March and showed some upward momentum after the up 0.3% in the prior month and flat reading in January.

The dollar value of shipments, unfilled orders, and inventories were all up 0.3% in March from February.

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