U.S. Durable Goods Orders Show Notable Pullback In April
After reporting a significant rebound in new orders for U.S. durable goods in the previous month, the Commerce Department released a report on Friday showing durable goods orders pulled back in the month of April.
The report said durable goods orders tumbled by 2.1 percent in April after jumping by a downwardly revised 1.7 percent in March.
Economists had expected orders to slump by 2.0 percent compared to the 2.6 percent spike that had been reported for the previous month.
Orders for transportation equipment led the pullback, plunging by 5.9 percent in April after surging up by 5.9 percent in March.
The report said orders for non-defense aircraft and parts plummeted by 25.1 percent in April after soaring by 7.8 percent in the previous month.
Excluding the steep drop in orders for transportation equipment, durable goods orders were unchanged in April following a revised 0.5 percent drop in March. Economists had expected a 0.2 percent uptick.
A notable increase in orders for electrical equipment, appliances and components was offset by decreases in orders for primary metals and communications equipment.
Meanwhile, the Commerce Department said orders for non-defense capital goods excluding aircraft, an indicator of business spending, slumped by 0.9 percent in April after rising by 0.3 percent in March.
Shipments in the same category were unchanged in April following a downwardly revised 0.6 percent drop in the previous month.
“Even assuming modest gains for May and June, growth in underlying capital goods shipments is now on course to do no better than flat-line in the second quarter,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
He added, “This suggests that business equipment investment growth has remained unusually weak in the second quarter, even before the potential hit to business confidence from the renewed flare-up in trade tensions.”
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