Orders for Durable Goods Off 4.1% in April
Orders for durable goods fell a wider-than-expected 4.1% in April, largely because of sagging demand for autos and aircraft, the Commerce Department said Wednesday.
The decline last month to a seasonally adjusted $123.27 billion followed a revised 6.5% rise in March, when car and plane orders were strong.
“The volatility in orders the last four months is attributable to the transportation equipment industry,” the department said. “Excluding transportation, orders have been relatively flat.”
Production at the nation’s factories slumped in April as car makers cut back the rate of auto assemblies in the face of weak sales.
The April orders decrease was sharper than forecast by economists, who had anticipated a 2.1% fall. It reinforced the impression of an economy that continues to grow at a sluggish and choppy pace.
“It kind of a coincides with the industrial production report we saw earlier,” which showed a 0.4% decline in April, said economist Thomas Runiewicz of the WEFA Group in Bala-Cynwyd, Pa. “It shows the manufacturing side is still sluggish and planners are still insecure about the future.”
“We’re running out of ways to say there is no change in the manufacturing sector. We’re waiting to see when the cat jumps. But this month it remained curled up on the hearth,” said Robert Dederick, chief economist of Northern Trust Bank in Chicago.
Built to last three years or more, durable goods are a key part of the manufacturing sector, and orders for the big-ticket items are closely watched as an indicator of the economy’s health.
The last time there was a larger orders drop was in January, when they fell 10.5% before rising 2.4% in February and continuing to gain in March.
Orders for all types of transportation goods fell by 14.3% in April after rising 23.4% in March.
Excluding transportation, orders fell in April by 0.1%.