Orders for durable goods, which had been expected to decline by 0.7% in April, instead rose by a modest 0.8% for the month. That increase followed an upwardly revised 3.6% surge in March. Originally, the March gain had been estimated at 2.5%.
The big assist this past month, meantime, was provided by military bookings. So strong was that showing that if we back out this component, instead of gaining 0.8% for the month, aggregate orders would have eased by that much.
Also, in April, the so-called core capital goods orders, which take in all forms of business investment, fell by 1.2%. That setback followed a revised 4.7% jump in March.
Meanwhile, the April increase made it three months in a row in which this volatile metric had pushed higher. At the same time, unfilled orders for manufactured durable goods, up for 12 of the past 13 months, edged up to $10.4 billion, a gain of 0.2%. That followed a rise of better than 1% in March. Inventories of manufactured goods also ticked up last month, gaining a token 0.1% for the month.
Within this overall grouping, we saw increases in April in orders for fabricated metals, computers and related products, electrical equipment, and a big jump in defense aircraft, which soared by more than 13% in the latest month. On the other hand, orders fell for primary metals, machinery, communications equipment, and motor vehicles and parts.
Taken as a whole, this was a decent report, especially as it was notably better than expected. However, the data, already volatile to begin with, was made even more so by the large jump in that one area, defense orders. This data did not tell us much more about the current quarter from a growth standpoint, except for the fact that we still believe GDP will rise by close to 3% in the period that ends late next month.
At the time of this article's writing, the author did not have positions in any of the companies mentioned