February durable goods orders popped 3.1 percent, well ahead of the 1.7 percent consensus estimate and good for the fastest pace since June. The number was especially impressive considering how strong the metric was for 2017, rising 13.8 percent in the fourth quarter to make it the second-best gainer of all the components that go into figuring out GDP.
Overall, the number is not a huge contributor to the economy — about 7.6 percent for 2017 — but could be indicative of larger trends, particularly in investment.
“With borrowing costs low, capacity utilization on the rise and the recent corporate tax cuts likely to provide further support, we expect business investment to continue to expand at a healthy pace over the coming quarters,” Andrew Hunter, U.S. economist at Capital Economics, said in a note.
The Atlanta Fed did not alter its 1.8 percent projection from the day’s data, saying the gains in durable goods were offset by a slightly below consensus reading on new home sales.
CNBC’s own Rapid Update tracker, derived from a select group of economists, has been more optimistic about the first quarter, putting its Q1 growth estimate at 2.3 percent.
The market will get the final revision for the fourth quarter, which was last reported at 2.5 percent and expected to stay there, according to consensus. However, Rapid Update puts the final estimate at 2.7 percent, and BofAML expects 2.8 percent. BofAML expects growth to slow to 2.4 percent in 2019.