A report released by the Commerce Department on Friday unexpectedly showed a continued surge in new orders for U.S. manufactured durable goods in the month of April.
The Commerce Department said durable goods orders jumped by 1.1 percent in April after spiking by 3.3 percent in March. The continued increase surprised economists, who had expected durable goods orders to slump by 1.0 percent.
Orders for transportation equipment led the way higher once again, shooting up by 3.7 percent in April after soaring by 9.9 percent in March.
The continued surge in orders for transportation equipment came as orders for defense aircraft and parts skyrocketed by 32.7 percent, offsetting an 8.3 percent pullback in orders for non-defense aircraft and parts.
Excluding orders for transportation equipment, durable goods orders dipped by 0.2 percent in April after rising by 0.3 percent in March. Economists had expected ex-transportation orders to edge down by 0.1 percent.
The modest decrease in ex-transportation orders came as steep drops in orders for computers and electronic products and electric equipment, appliances and components offset a jump in orders for machinery.
“Orders were more subdued after stripping out volatile transportation orders, but there were still some pockets of strength,” said Nancy Vanden Houten, Lead US Economist at Oxford Economics.
She added, “Durable goods activity is especially sensitive to credit conditions, and we think that increasingly restrictive lending standards will lead businesses and consumers to pull back on spending later this year and early in 2024.”
The report said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, surged by 1.4 percent in April after falling by 0.6 percent.
Shipments in the same category, which is the source data for equipment investment in GDP, rose by 0.5 percent in April after slipping by 0.2 percent in March.
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