After reporting a sharp drop in new orders for manufactured durable goods in the previous month, the Commerce Department released a report on Friday showing that durable goods orders rebounded by more than anticipated in the month of April.
The report said durable goods orders surged up by 3.3 percent in April after tumbling by a revised 5.9 percent in March.
Economists had expected orders to climb 1.1 percent compared to the 5.7 percent drop that had been reported for the previous month.
The bigger than expected increase in durable goods orders was partly due to a notable rebound by orders for transportation equipment, which rose by 8.1 percent in April and falling by 14.7 percent in March.
Orders for commercial aircraft and parts jumped 18.1 percent, contributing to the rebound in orders for transportation equipment.
Nonetheless, durable goods orders still rose by 1.3 percent in April excluding the rebound in orders for transportation equipment compared to a 1.7 percent drop in March.
The report showed a 3.6 percent increase in orders for computers and electronic products as well as notable growth in orders for machinery and fabricated metal products.
Additionally, the Commerce Department said orders for non-defense capital goods excluding aircraft, an indicator of future business spending, rose by 1.2 percent in April after climbing 0.9 percent in March.
Christoph Balz, an economist at Commerzbank, said, "The 3.3% increase in new orders for U.S. durable goods in April not only resulted from stronger demand for aircraft and defense goods but also reflects a solid rise in orders of key capital goods that indicate future business investment."
"Thus the report suggests that capital spending should remain a key driver of the economic recovery in the U.S.," he added.
by RTT Staff Writer
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