EconoFACTS

April 29, 2026 | 09:05

U.S. Durable Goods Orders and Housing Starts Rebound in March

Economist

Senior Economist and Director
Economics

Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

Sal Guatieri

Senior Economist and Director
Economics

Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

Surging capital goods orders and housing starts in March suggest the U.S. economy strengthened meaningfully in the first quarter. Durable goods orders jumped 0.8% in March following a 1.2% decline the prior month, topping expectations. But the highlight was a 3.3% spike (the largest in nearly six years) in nondefence capital goods orders excluding aircraft after an upwardly-revised 1.6% leap the prior month. The increase was broadly based though led by computers and electronic products (3.7%). Nondefence shipments of capital goods (including aircraft) rose a more moderate 0.5% after a modest decline in February, but were still up 7.8% annualized in Q1. This signals another strong increase in business equipment spending in tomorrow's Q1 real GDP release, which should anchor a solid 2.3% annualized expansion of the economy following the government-shutdown-depressed 0.5% advance in Q4. There appears to be no let up in the AI-driven investment boom.

Meantime, the housing market received a dose of good news, as housing starts popped 10.8% to a more than one year high of 1.502 million annualized in March, following a 3.0% decline in February. The increase spanned all four major geographical regions as well as singles and multiples. Still, just to reinforce the view that the real estate market is likely to remain held back by high home prices and mortgage rates for a while longer, building permits plunged 10.8% in March, retracing the prior months upward spike.

The one disappointing report this morning was the U.S. goods trade deficit increasing to $87.9 billion in March from $83.5 billion in February, with imports rising somewhat faster than exports. The increase in imports was widespread, though led by autos.

Bottom Line: Two out of three ain't bad, suggesting the U.S. economy's resilience remains intact despite the trade and Iran wars, with the AI boom going a long way to masking impediments.

Table 1 - United States — Durable Goods Orders

(month/month % change : s.a.)

Source: BMO Economics, Haver Analytics

Table 2 - United States — Housing Starts, Building Permits

(millions of units : a.r.)

Source: BMO Economics, Haver Analytics