Factory Orders and Durable Goods Data: March Economic Analysis

March Factory Orders

• 📈 Factory orders for March increased by 4.3%, exceeding expectations of 4.5% but still representing a significant number.
• 💡 This 4.3% growth is the strongest seen since July 2020, nearly a five-year high.
• ⚠️ However, when transportation components are excluded, the growth rate plummets to -0.2%.

Durable Goods Performance

• 📊 The final read on durable goods data remained strong at 9.2%, also the best performance since July 2020.
• 🚗 Similar to factory orders, the strength in durable goods was heavily influenced by the transportation sector.
• 🚫 Excluding transportation, the durable goods sector showed zero growth (0.0%), indicating a flat performance otherwise.

Capital Spending Indicators

• 💰 Non-defense capital orders (excluding aircraft), a proxy for capital spending, showed a slight increase of 0.1%.
• 🚚 Shipments data also saw a modest shift, moving from 0.3% to 0.2%.

Overall Economic Snapshot

• 🔍 The data indicates that transportation was a significant driver of positive economic numbers in March.
• 📉 Once the impact of transportation, particularly aircraft, is removed, the growth in manufacturing orders and durable goods dissipates considerably.

Interest Rate Context

• 📈 On a week-over-week basis, the 2-year Treasury yield is unchanged, despite a slight increase on the day.
• 📉 The 10-year Treasury yield is up three basis points on the week, currently standing at 4.27%.