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(CEP News) - Following an upside surprise in the advance durable goods report last week, economists are divided on how Friday's full report on factory orders will turn out. The median average seeks a 0.2% advance in March, but the range of forecasts varies from a 1.0% increase to a 1.3% decline.
The factory orders report is an expanded look at sales of durable goods, and also includes data on non-durable goods such as food, clothing, and fuel. Benjamin Reitzes, economist at BMO Capital Markets, said the report is expected to see no change from the previous month. Most of the information has already been supplied in the durable goods report and the quarterly GDP numbers, so this index will likely be background noise as markets put more focus on the payrolls data, he said. In the advance report, U.S. durable goods orders excluding transportation rose 1.5% in March, against calls for a 0.6% increase. The previous month's 2.4% pullback was revised down three-tenths to 2.1%. Economists had said these numbers would support flat or marginal growth in the broader U.S. economy in Q1, as confirmed in the GDP report on Wednesday. Total durable goods orders were down for the third consecutive month, falling 0.3% in March, following a revised 0.9% decline in February. Paul Ashworth from Capital Economics said the main culprits for the broader decline were orders for motor vehicles, which dropped by 4.6%, and electronics, which fell by 6.6%. TD Securities' Charmaine Buskas said the ex-transport figures "show a little bit of support for U.S. goods, most likely from overseas thanks to weakness in the U.S. dollar," but added that the broader trend is soft. Paul Ferley, assistant chief economist at RBC Capital Markets, said usually there aren't major revisions in durable goods between the advance and the full report, so the main focus will be on non-durable goods orders. Aside from that, he said non-defense capital goods minus transport will be key, as it gives a handle on how business investment is holding up in the U.S. In the advance report it came in with a 1.2% advance in the month, so the hope will be that the level is maintained in the full report. By Patrick McGee,
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