New orders for manufactured durable goods increased (+3.2%) in March to $276.4B, this follows a (-1.2%) decrease in February and a (-5.0%) decrease in January. Total durable goods orders are up (+3.3%) year over year. Much of the increase in the headline number is attributable to a (+78.4%) jump in new orders for passenger planes, this follows (-8.4%) and (-56.3%) readings for the previous 2 months. Orders for nondefense aircraft and parts increased (+10.4%), computers and electronics (+1.9%), and appliances (+0.8%), while automobile makers reported a slight drop (-0.1%) in new orders. Excluding the steep increase in orders for transportation equipment, “core” durable goods orders rose (+0.3%) and follows readings of (-0.3%) and (+0.4%) for the previous 2 months. New orders for capital goods increased (+8.7%) as nondefense orders increased (+10.4%). Excluding defense, new orders increased (+3.5%). Shipments of manufactured durable goods increased (+1.1%) to $277.0B and follows readings of (-0.8%), and (-0.4%) for the previous 2 months. Unfilled orders, up thirty of the last thirty-one months, increased (+0.4%) to $1,160B. Inventories decreased (-0.9%) to $488.8B and follows readings of (+0.1%), and (-0.2%) for the previous 2 months.

The Commerce Department’s first estimate on the first-quarter gross domestic product (GDP) growth reported the economy expanded at an annual rate of 1.1%. The first estimate is well under the 2.6% growth in the fourth quarter. Primary contributors to the slowdown in growth were a decline in private inventory investment and a deceleration in nonresidential fixed investment. The inventory slowdown took 2.26 percentage points off the headline number. Business investment increased slightly (+0.7%) and followed a (+4.0%) reading in the prior quarter. Business investment added only 0.10 percentage points to the headline number. Consumer spending as measured by personal consumption expenditures was strong, increasing (+3.7%), up from (+1.0%), the previous quarter. Government consumption expenditures reported up (+4.7%) and added 0.81 percentage points to the headline number. The personal consumption expenditures price index, a closely watched measure of inflation by the Federal Reserve, increased (+4.2%), as compared to (+3.7%), (+4.3%), (+7.3%), and (+7.5%) over the previous four quarters. Core personal consumption expenditures, which strips out food and energy, increased 4.9%, as compared to (+4.4%), (+4.7%), (+4.7), and (+5.6%) over the four previous quarters.

The Personal Consumption Expenditures (PCE) price index increased 4.2% from March 2022, as compared to readings of (+5.1%), (+5.4%), (+5.3%) and (+5.7%) over the previous months. This is the lowest level since May 2021. The PCE is watched closely by the Fed as it portends future inflation. On a monthly basis, the headline number showed a (+0.1%) increase, as compared to (+0.3%), (+0.6%), (+0.3%), and (+0.4%) over the previous months. Consumer spending was little changed in March as an increase in spending on services was offset by a decrease in spending on goods. Lower food and energy costs helped slow the pace of inflation as food prices decreased (-0.2%) and energy prices decreased (-3.7%). The closely watched core PCE index, which strips out the more volatile factors of food and energy continued to plateau with a year over year (+4.6%) increase, this follows readings of (+4.7%), (+4.7%), (+4.6%), and (+4.8%) over the previous months.