Factory Orders Increase By Less Than Expected In April

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Thursday morning, the Commerce Department released its report on new orders for manufactured goods in the month of April, showing that orders increased by less than economists had been anticipating. Factory orders showed a modest decrease excluding orders for transportation equipment.

The report showed that factory orders increased by 1.2 percent in April following an upwardly revised 1.7 percent increase in March. Economists had expected orders to increase by 1.7 percent compared to the 1.3 percent growth originally reported for the previous month.

A notable increase in durable goods orders contributed to the factory orders growth, with durable goods orders increasing by 2.8 percent in April after edging up by 0.1 percent in March. The increase reflects a modest downward revision from the 2.9 percent growth reported last week.

The durable goods orders growth was largely due to a 15.8 percent increase in orders for transportation equipment in April, which followed a 13.2 percent drop in the previous month. A substantial increase in orders for commercial aircraft and parts contributed to the rebound.

Meanwhile, the report also showed that orders for non-durable goods edged down by 0.1 percent in April after surging up by 3.1 percent in March.

As mentioned above, the Commerce Department noted that factory orders actually edged down by 0.5 percent excluding the jump in orders for transportation equipment. This compares to a 3.8 percent increase in the previous month.

The report also showed that shipments of manufactured goods increased by 0.6 percent in April after surging up by 2.6 percent in March, while inventories of manufactured goods rose by 0.5 percent for the second consecutive month.

With shipments and inventories increasing at roughly the same pace, the inventories-to-shipments ratio was unchanged from the previous month at 1.24.

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