Orders for U.S. durable goods increase more than forecast
ORDERS FOR DURABLE GOODS from the United States increased more than forecast in April.
BLOOMBERG FILE PHOTO/SCOTT EELLS
By Alex Kowalski Bloomberg News
WASHINGTON - Orders for U.S. durable goods increased more than forecast in April, pointing to gains in business investment that will help manufacturing rebound in the second half of the year.
Bookings for equipment meant to last at least three years increased 3.3 percent last month after dropping 5.9 percent in March, the Commerce Department said today in Washington. The median forecast from 78 economists surveyed by Bloomberg projected a 1.5 percent increase.
Quickening activity in the housing and auto industries may ripple throughout manufacturing, rendering the economy better able to recover from a slowdown this quarter. At the same time, government cutbacks, higher taxes on consumers and cooling exports are crimping demand, which means any acceleration will be slow to develop.
“This report is consistent with the economy continuing to recover, but just at a moderate pace,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla., and the second-best forecaster of capital goods orders over the past two years, according to data compiled by Bloomberg. “We’re not getting much demand from the rest of the world, but we are getting growth domestically.”
Stock-index futures trimmed earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in June fell 0.5 percent to 1,641.3 at 8:52 a.m. in New York. The gauge had been down as much as 0.7 percent.
Estimates in the Bloomberg survey of economists ranged from a drop of 5.9 percent to a gain of 4.6 percent. The Commerce Department revised the March decline from a previously reported 6.9 percent drop.
Bookings for commercial aircraft climbed 18.1 percent last month after slumping 43 percent in March, today’s report showed. Boeing Co., the Chicago-based aerospace company, said it received 51 orders last month, up from 29 in March.
Excluding the more volatile transportation equipment component, durable orders climbed 1.3 percent, the first gain in three months.
Bookings for non-defense capital goods excluding aircraft, considered a proxy for business investment in items such as computers, engines and communications gear, increased 1.2 percent after a 0.9 percent gain the prior month that was previously reported as a drop.