Morning Report: Durable goods orders jump

Posted on March 26, 2025 by Brent Nyitray

Vital Statistics:

Mortgage applications fell 2% last week as purchases fell 1% and refis fell 5%. “Purchase applications saw the strongest weekly pace in almost two months and were 7 percent higher than a year ago. Last week’s purchase activity was driven primarily by a 6 percent increase in FHA applications, as the combination of loosening housing inventory and slowly declining mortgage rates have presented this segment of buyers with more opportunities,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Additionally, VA purchase applications saw a modest increase over the week. Overall applications declined, however, as refinance applications were down 5 percent to its lowest level in a month.”

Added Kan, “Markets remained focused on potential trade policy changes, while the Fed held the funds rate its current level, resulting in the 30-year fixed rate averaging 6.71 percent last week.” 

Durable goods orders rose 0.9% in February, which was well above Street expectations. Durable goods orders ex-transportation rose 0.7%, again above expectations. The upside surprise was primarily attributed to aircraft orders. The strength in orders is being attributed to a rebound after a few weak months. Business might be front-loading some orders ahead of tariffs. That said, shipments remain strong so business is doing reasonably well.

It does pour some cold water on the narrative that Trump is causing enough uncertainty that business is sitting on its hands. I am not sure how much of this is astroturfed media wishcasting and how much is real. Q1 earnings will tell the story, especially what is said on earnings conference calls.

The latest Atlanta Fed GDP Now model still sees -1.8% growth in Q1 however.

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