Airline, auto declines account for bulk of reversal, U.S. data indicate
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — U.S. orders for durable goods fell sharply in April, mainly because of lower demand for aircraft and autos, the government reported Wednesday.
The Commerce Department said new orders for U.S.-made products designed to last three years or more, such as autos or appliances, dropped 3.6% last month.
Economists surveyed by MarketWatch had expected orders to fall 3.0%, owing to fewer bookings for aircraft from Boeing Co. BA -0.93% and to parts-supply disruptions in the auto business related to Japan’s March 11 earthquake. Orders also have a pattern of declining in the first month of a new quarter.
April orders fell 1.5% after factoring out the volatile transportation sector, marking the third decline in fourth months. Transportation orders slumped 9.5%.
Orders not including defense fell 3.6%. Government purchases of defense products are uneven and can sometimes distort the data.
Another category of orders closely watched by economists, known as core capital goods, dropped 2.6%, a reversal after having surged 5.4% in March. That category excludes defense and aircraft and gives a better indication of longer-term trends in the private sector.
Shipments of durable goods, meanwhile, decreased 1.0%.
Shipments of core capital equipment goods, which the government uses to help calculate gross domestic product, fell 1.7% in April.
Inventories of durable goods climbed 0.9% last month — the 16th consecutive increase.
Orders for March, meanwhile, were revised higher to show a gain of 4.4% instead of 4.1% as originally reported, according to government data.
