A second straight month of stagnant orders for business equipment in April indicates investment in capital goods could slow in the second quarter, Commerce Department data showed Friday.
Highlights of Durable Goods Report (April)
Orders for non-military capital goods excluding aircraft unchanged (forecast 0.5% gain) after March revised down to no change Shipments of such capital equipment, used to calculate GDP, fell 0.1% (forecast 0.5% gain) after revised 0.2% gain Bookings for all durable goods fell 0.7% (forecast 1.5% drop) after a revised 2.3% increase Excluding transportation-equipment demand, which is volatile, orders dropped 0.4% after 0.8% gain in prior month
Key Takeaways
The figures on orders and shipments may raise concern that a pickup in first-quarter business investment was temporary. The data may also indicate that companies may be growing reluctant to move forward on expansion plans until lawmakers in Washington come to an agreement on tax legislation and infrastructure spending. Orders dropped in April for machinery, fabricated metals and electrical equipment. A separate release from the Commerce Department on gross domestic product showed business investment in equipment rose an annualized 7.2 percent in the first quarter, the most since the third quarter 2015.
Other Details
Orders for motor vehicles and parts rose 0.3 percent in April; consistent with industry data showing a small pickup in the pace of auto sales Orders for fabricated metal products fell 0.9 percent, while bookings for machinery declined 0.8 percent Demand for electrical equipment and appliances slumped 1.7 percent; orders for computers and electronic products increased 1.4 percent Bookings for civilian aircraft and parts fell 9.2 percent; defense capital-goods orders rose 4.2 percent Durable goods inventories rose 0.1 percent; unfilled orders for non-defense capital goods excluding aircraft were up 0.1 percent for a second month.
