March durable goods orders data were well above expectations for an aircraft-led gain, with the headline number rising by 2.7%, compared with a 0.8% gain expected by a Bloomberg median and a 0.6% gain in an MNI survey.
This followed an upward revision to the previous month's orders and may lead to upward adjustments to forecasts for first quarter non-residential fixed investment, the Commerce Department reported.
The durable goods orders gain was mostly due to a 7.0% increase in transportation orders, particularly a 31.2% rebound in nondefense aircraft orders. Boeing orders were up in March despite concerns about the MAX series, so a rebound in aircraft orders was expected.
Excluding transportation, new orders rose 0.4% in the month, above the 0.2% gain expected in a Bloomberg survey, but as expected in an MNI survey.
There were gains in communications equipment and machinery, and declines in primary metals and fabricated metal products.
The 9.0% gain for communications equipment was the strongest since January 2015, when it posted a 13.4% increase.
Nondefense capital goods new orders were up 6.5% in March, and were up by only 1.3% excluding aircraft. Nondefense capital goods shipments were flat in the month, while shipments ex. aircraft were down 0.2%.
Analysts are likely to raise their forecasts for nonresidential fixed investment ahead of Friday's advance Q1 GDP report.
