Durable goods orders unexpectedly up in April
Orders for long-lasting durable goods surprisingly rose in April, the third straight monthly increase and a sign that factories will be increasing production after a slow winter, the Commerce Department said Tuesday.
New orders were up 0.8% last month after an upwardly revised 3.6% gain in March.
Analysts had expected durable goods orders to drop 0.8% in April after the strong March performance, which was initially estimated as a 2.6% increase.
But fueled by a 2.3% rise in orders for transportation equipment and military aircraft, the important measure of future economic activity posted another gain last month.
Excluding transportation, an often-volatile category, orders were up 0.1% in April after a 2.9% increase the previous month.
Durable goods, such as automobiles, appliances and computers, are meant to last at least three years. Orders for those goods are a gauge of upcoming output in the crucial manufacturing sector.
“The economy is stronger than you think,” Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York, said of Tuesday’s report.
He also said that a key category indicating business investment was revised up to a record high of $70.9 billion in March, a 4.7% increase from the previous month.
The figure -- orders for non-defense capital goods, excluding aircraft -- dropped 1.2% in April to $70 billion, but remained strong, Rupkey said.
Durable goods orders rose in April even though a key contributor to previous increases, Boeing Co., reported a down month.
After receiving 163 orders for new aircraft in March, Boeing reported just 70 orders last month.
But orders for defense aircraft and parts jumped 13.1% in April, after dropping 9.6% the previous month.
In addition, orders rose for computers, electrical equipment, appliances and fabricated metal products.
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