After reporting a sharp drop in durable goods orders in the month of March, the Commerce Department released a report on Thursday showing a modest increase in durable goods orders in April.
The report showed that durable goods orders edged up by 0.2 percent in April after tumbling by 3.7 percent in March. The steep drop reported for March reflected a revision from the 4.2 percent decrease that had been reported previously.
A rebound in orders for transportation equipment contributed to the modest increase in durable goods orders, with transportation orders rising by 2.1 percent in April following a 10.5 percent drop in March.
Orders for non-defense aircraft and parts rose by 7.2 percent in April after plunging by 46.6 percent in March, although the increase confounded economists in light of the fact that aerospace giant Boeing (BA) reported orders for only four planes during the month.
Excluding the increase in orders for transportation equipment, durable goods orders fell by 0.6 percent in April compared to a 0.8 percent decrease in March.
The drop in ex-transportation orders reflected decreases in orders for machinery, fabricated metal products, and computers and electronic products.
The report also showed that orders for non-defense capital goods excluding aircraft, which are seen as an indicator of business spending, fell by 1.9 percent in April following a 2.2 percent drop in March.
Jennifer Lee, senior economist at BMO Capital Markets, said, "We haven't seen two straight months of declines for over a year, a negative development for equipment & spending in the latter half of this year."
"There is a possibility that concerns over global growth, stemming from Europe, are causing businesses to hold back orders for new equipment," she added.
The Commerce Department said shipments of durable goods increased for the fourth time in the past five months, climbing by 0.7 percent in April following a 1.0 percent increase in March.
Inventories of durable goods edged up by 0.3 percent in April, marking the twenty-seventh increase in the last twenty-eight months.
by RTT Staff Writer
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