WASHINGTON — U.S. April durable goods orders posted a 0.5% decrease, its third drop in four months, but with significantly different moves in components that show weakness was centered in transportation.
Durables orders excluding transportation were up 2.5%, for the second consecutive month, and nonmilitary orders were down 0.3%.
Motor vehicles printed down 3.3% and commercial aircraft printed a 24.4% decline. Boeing Co. reported 58 new orders for private airplanes after 99 in March, and its order book is retrenching as carriers cancel pending orders.
Durables was driven by a 27.8% rise in electrical equipment, its biggest gain ever. There was no reason given, as the Commerce Department’s detailed data will not be published until next week. But the ending of the auto parts strike possibly downstreamed orders to selected components manufacturers.
There also was a 2.8% gain in primary metals and a 4.2% advance in machinery. Shipments were 1.2% higher, and inventories gained 0.5% — up in nine of the last 10 months.
Nonmilitary capital goods shipments were up 1.3%, suggesting business investment spending was rising at the start of the second quarter.
This is a better-than-expected report, but it still does not suggest the manufacturing sector is out of the woods. Inventories are high and rising — the Commerce Department said inventories are at their highest levels since 1992 when the current series started — and orders remain uneven across industries. It appears that the transportation sector will lag in any manufacturing upturn, unless military spending rises abruptly.
— Market News International
