New orders for manufactured durable goods are up 2.6% from February and up for the second consecutive month. Excluding the volatile transportation component, new orders were up 0.2% compared to February. Nondefense new orders for capital goods (i.e. farm machinery and construction equipment) increased sharply, climbing 5.4% in March.
March retail sales came in at a $709.6 billion rate, up 0.7% from February and up 4.0% from a $682.2 billion rate in March 2023. Excluding sales from gas stations, total sales were up 0.6% from February to a $655.0 billion rate. Year-to-date actual sales are now up 3.3% compared to Q1 2023. The largest increases in March, compared to February, came from building material and garden stores, gas stations, and online retailers. These increases helped to offset declines seen in sales at motor vehicle dealers, electronic and appliance stores, and clothing stores.
Prices paid by consumers continued to climb faster than market expectations. The March Consumer Price Index saw prices for all goods increase 3.48% compared to last year, the fastest increase since September. Within the overall CPI, both food and energy prices increased compared to year ago levels, climbing 2.2% and 2.1%, respectively. Compared to last March, the shelter component increased 5.7%, accounting for over 60% of the total increase.
After contracting for sixteen consecutive months, economic activity in the manufacturing sector expanded in March. The March ISM Manufacturing Index came in at 50.3, up from 47.8 in February and up from 46.3 last March. This is the highest monthly reading since September 2022.The production and new order components both rebounded, climbing 6.2 and 2.2 points, respectively. The increase in new orders points to firming demand for manufactured goods and suggests inventories are more aligned with sales.
