26 April 2006, 17:15  Orders for new U.S.-made durable goods increased 6.1% in March

Orders for new U.S.-made durable goods increased 6.1% in March, led by strong demand for airplanes, machinery and electronics, the Commerce Department said Wednesday. The increase in new orders was the largest since May 2005 and far exceeded the 2.1% gain expected by economists surveyed by MarketWatch. Orders rose an upwardly revised 3.4% in February. Orders are up 12.2% year-to-date and have increased in five of the past six months. The big story in March was continued strength in orders for civilian aircraft, which increased 71% in March after a 60% gain in February. Orders for airplanes are up 130% year-to-date, reflecting strong export sales by Boeing, in particular. Excluding the 14% rise in transportation goods, new orders rose 2.8% in March, the biggest gain since August. Outside of aircraft, the order book was still strong. Orders for core capital equipment goods - the best indication of business investment plans - increased 3% in March after falling 0.8% in February. Core capital goods shipments increased 1.6%. While new orders were up sharply in the past two months, shipments of durable goods rose a more modest 0.3% in March after a 0.4% gain in February. Shipments are up 8.2% year-to-date. Unfilled orders - a sign of future production - increased 2.8% after rising 1% in February. Inventories rose 0.7% in March after falling 0.4% in February. The report adds to the evidence that the economy grew robustly in the first quarter. The Commerce Department will report on first-quarter growth figures on Friday. Economists expect gross domestic product increased at a 4.8% annual pace after growing just 1.7% in the fourth quarter. Federal Reserve chief Ben Bernanke will testify on Thursday about the state of the economy. He's expected to highlight figures such as the strong durable goods report as evidence for the economy's strength, while warning of budding inflationary pressures and the possible drag from energy prices and a fading housing market.

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