Strong durable goods order data for March showed the robust nature of the economy, and this continued improvement could help bolster loan origination by making consumers more confident.
Commerce Department figures revealed that during the month, these orders surged 2.6 percent to reach $234.8 billion. This total represented the largest increase in this particular activity since November.
Government data above expectations
The figures surpassed the predictions of many market experts, including a median forecast of a 2 percent gain from economists in a Bloomberg News survey. A total of 77 economists took part in this poll, giving estimates ranging from a 0.2 percent decline to a 3.6 percent increase.
This strong performance built upon the 2.1 percent jump that durable goods orders enjoyed in February.
Economy could be turning around
While the U.S. economy grew slowly in the first quarter amid harsh winter weather, the Commerce Department report bolstered hopes that the recovery has accelerated, according to Reuters.
"The economic expansion is moving along at a solid pace. We don't see a lot of clouds on the horizon right now," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, told the news source.
Various reports have painted a picture that the recovery is speeding up, according to the media outlet. Data on retail sales and industrial production have all supported this point of view. In addition, the labor market has been steadily improving.
Consumer confidence has also been ticking higher, and this could combine with rising corporate investment in durable goods to increase the performance of both manufacturing firms and also the total output of the U.S. economy, according to Bloomberg News. Robert Stein, deputy chief economist at First Trust Portfolios LP, spoke to the key importance of the strong orders for long-term capital equipment.
Economist notes key importance of durable goods data
"It sets things up very well for the second quarter," Stein, whose prediction matched up with the actual figures for durable goods, told the media outlet. The market expert has given very accurate forecasts over the last two years, according to Bloomberg data. "Business investment will be a solid contributor to growth."
If he is right about the future trajectory of the economy, consumers might seek out more credit as a result of their optimistic nature. This development could help bolster loan origination.