Overall durable goods orders are expected to show a slight decrease in March confirming a slow economic recovery ever since the beginning of the quarter.

Economists are predicting Wednesday’s report to headline a 1.7 percent drop in overall orders. The sharp fall of Boeing orders this past month – from 237 in February to 53 in March – is what has analysts calling the “big maker” of the decline.

While the number isn’t “great,” analysts agree with the idea that we shouldn’t get bugged down by the head figure.

Durable goods being an extremely volatile indicator, largely because of defense and commercial transportation orders, has economists looking beyond these numbers to analyze the underlying economic well-being of the manufacturing sector.

Excluding transportation – and looking more closely at household goods, cars and equipment — expectations are more cheerful yet soft.

“The economy is growing but we’re still looking at a fair recovery,” said Sean Incremona, a senior economist at 4Cast Inc.

Indeed.

Since the end of last year – which saw its biggest increase for the month of December with an all time high of 3 percent due to a tax credit that benefited businesses purchasing power, durable goods orders have since largely dropped and only risen softly in this year’s first quarter. The Department of Commerce’s data showed that goods orders rose 2.2 percent in February to $211.8 billion, only partially reversing January’s 3.6 percent sharp decline.

Economists predict that last month’s durable goods excluding transportation will rise by a modest 0.5 percent.  Meanwhile, they predict core capital goods to increase 1.2 percent.

“This is a mild trend,” said Incremona. “But I believe we’re still looking at a tax credit hangover effect.”

Regardless of this rather small increase, economists agree with the idea that these numbers are optimistic.

“We’re in a period of stabilizing our economy right now,” said Nathaniel Karp, an economist at BBVA Compass Bank.

In fact, American manufacturing will probably give way to the handicapped European and Chinese business investments, which have stalled after more than a decade performance.

But as investors look to Wednesday’s release as a way to analyze U.S. economic growth, economists believe the indicator will not largely influence businesses.

“The story this month is more about what the Fed will say,” said Tom Porcelli, a senior economists at RBC Capital Markets.

The Fed will release its latest rounds of quarterly forecasts at 2pm on Wednesday, and many believe that economic growth in the United States might be higher than the 2.2 percent estimate given in January — a good sign that recovery is on its way.

“Looking at durable goods excluding transportation trends, we see the conditions for recovery are positive,” said Karp. “And that should reflect in the Fed estimates, demonstrating that overall conditions from companies are relatively solid and strong.”

 

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