Durable-Goods Orders in U.S. Dropped 3.6% in April, the Most in Six Months

Source: Bloomberg

By Shobhana Chandra

May 25 (Bloomberg) -- Orders for U.S. durable goods dropped more than forecast in April, reflecting a slump in aircraft demand and disruptions in supplies of auto parts stemming from the earthquake in Japan.

The 3.6 percent decrease in bookings for goods meant to last at least three years was the biggest since October and followed a 4.4 percent surge in March that was larger than previously estimated, a Commerce Department report showed today in Washington. Economists projected a 2.5 percent April decline, according to the median forecast in a Bloomberg News survey.

Bookings for Boeing Co. aircraft slumped last month and vehicle makers slowed production due to a components shortage that may be short-lived as Japanese factories recover. At the same time, rising overseas sales at manufacturers such as Deere & Co. and General Electric Co. indicate the industry will keep driving the U.S. expansion.

“Manufacturing is likely to moderate from the explosive pace of growth in the past few months,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. At the same time, “consumer demand and investment demand are both doing well right now,” he said.

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