WASHINGTON - Orders to U.S. factories for durable goods rebounded in March, reflecting demand for electronic goods, aircraft, and autos, government figures showed Wednesday.
Orders for durable goods - expensive items expected to last three or more years - rose 2.6% last month, to a seasonally adjusted $215.2 billion, after falling 2% in February and 1.9% in January, the Commerce Department said.
The March increase suggested that companies are betting consumer spending won't slow down even after the Federal Reserve's five interest rate increases since June 30.
"The economy is still on fire," said Joel L. Naroff, president of Naroff Economic Advisors in Holland, Pa. Analysts had expected orders to rise 1.9% in March.
Durable goods orders rose at an annual rate of 9% in the first quarter, compared with a 5.2% pace in the fourth quarter of 1999, according to Bloomberg analytics.
Shipments of nondefense capital goods other than aircraft, a measure of business investment, rose 2.9% in March. In the first three months of the year, they grew at a 25% annual rate, the largest gain since the fourth quarter of 1994.
Orders excluding transportation rose 2.8%, the largest gain since July. Orders excluding defense goods rose 3.7%, the first increase since December.
The report is the third this week to show continued strength in the economy. On Tuesday, the National Association of Realtors said sales of existing homes rose 1.5% in March. The Conference Board reported that consumer confidence held in April near the record set in January and the expectations index rose.
The Commerce Department is to issue its initial estimate of first-quarter gross domestic product today. Economists expect the report to show that the economy grew at a 6% annual rate after a 7.3% pace in the final three months of 1999. The U.S. expansion entered a record 10th year this month.
The largest single gain in durable goods orders was in electronic equipment, a category that includes communications equipment; appliances; video equipment; and a range of components such as semiconductors, circuit boards, capacitors, resistors, coils, and transformers.
Electronic equipment orders rose 9.7% after a February increase of 9.3%, and March orders were up 31% from a year earlier.
- Bloomberg News