Durable Goods Orders Decreased in April

May 28, 2008

New orders for manufactured durable goods in April, decreased $1 billion or 0.5% to $214.4 billion, the U.S. Census Bureau announced on May 28. This was the third decrease in four months and followed a 0.3% March decrease.

Excluding transportation, new orders increased 2.5%. Excluding defense, new orders decreased 0.3%.

Transportation equipment, down three of the last four months, had the largest decrease, $4.8 billion or 8% to $56.1 billion.

Computers and electronic products, up following two consecutive monthly decreases, increased $1.4 billion or 4.3% to $32.8 billion.

Machinery, up ten of the last eleven months, increased $3.1 billion or 3.3% to $97.5 billion.

Inventories of manufactured durable goods in April, up nine of the last ten months, increased $1.7 billion or 0.5% to $328.6 billion.

"The good news in the report is that nondefense capital goods orders, excluding aircraft, gained 4.3% in April after declining 1% in March and 0.9% in February. Nondefense capital goods orders, excluding aircraft, is a leading indicator of business equipment spending in the GDP accounts. said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI.

"The report indicates that the real weakness in this recession is the consumer sector, not business investment," he added. "Business equipment investment was not overdone in the expansion and there are very few excesses to work off. Fortunately, the dollar is falling in value which increases the competitiveness of U.S. made products in international markets. The resulting strong export growth for U.S. made capital goods is cushioning the manufacturing downturn."

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