A report released by the Commerce Department on Wednesday showed new orders for U.S. manufactured durable goods increased by less than expected in the month of April.
The Commerce Department said durable goods orders rose by 0.4 percent in April after climbing by a downwardly revised 0.6 percent in March.
Economists had expected durable goods orders to advance by 0.6 percent compared to the 1.1 percent jump that had been reported for the previous month.
Michael Pearce, Senior U.S. Economist at Capital Economics, said the modest increase in durable goods orders “suggests that rate-sensitive business equipment investment growth is beginning to slow, with underlying capital goods shipments consistent with a sharp slowdown in business equipment investment growth from 15% in the first quarter to something closer to 6% annualized.”
“That is consistent with our view that economic activity is bending rather than breaking under the impact of higher rates,” he added.
The increase in durable goods orders was led by a rebound in orders for transportation, which climbed by 0.6 percent in April after dipping by 0.3 percent in March.
Orders for non-defense aircraft and parts soared by 4.3 percent in April following an 8.1 percent nosedive in the previous month.
Excluding orders for transportation equipment, durable goods orders edged up by 0.3 percent in April after surging by 1.1 percent in March. Ex-transportation orders were also expected to increase by 0.6 percent.
The report showed notable increases in orders for machinery and primary metals, while orders for fabricated metal products and electrical equipment, appliances and components edged lower.
Orders for non-defense capital goods excluding aircraft, a key indicator of business spending, rose by 0.3 percent in April after jumping by 1.1 percent in March.
Shipments in the same category, which is the source data for equipment investment in GDP, increased by 0.8 percent in April after inching up by 0.2 percent in the previous month.
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