Aircraft Sales Have Durable Goods Flying High

Improvement in the factory sector looked material last month. The overall level of durable goods orders jumped 3.0% and that followed an upwardly revised 1.9% December increase. Transportation spiked 15.6% in January after a 1.5% rise the month before. For the latest month, non-defense aircraft lifted-off to a monthly 126.0% increase; defense aircraft rose 11.6%;

The results far outpaced analyst expectations for only a 1.5% overall gain. The notable strength of course came from orders for non-defense aircraft & parts. Those gains that more than doubled, recouped any declines the prior two months.

Regardless of the aircraft sector, the durable factory goods sector appeared on the mend as well. Less the transportation sector, orders were enough to lift the y/y gain in orders to 8.6%. This strength suggests further improvement in shipments and that industrial output is accelerating after the modest y/y gains already logged in prior months.

Looking at core components, most of them posted gains. Leading those components: Computers & electronics were up 4.6% and communications equipment rose 3.1%. Also improving were primary metals, and electrical equipment.

Thursday’s report underscores a manufacturing sector that continues its path of accelerated Q1 growth.

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