Despite initial expectations, new orders for U.S. manufactured durable goods saw an unexpected increase in April, as per the Commerce Department's report released on Friday. This growth followed a significant downward revision of March's figures.
The data revealed that durable goods orders rose by 0.7 percent in April, after a revised increase of 0.8 percent in March. Economists had anticipated a decline of 0.8 percent, in stark contrast to the originally reported 2.6 percent surge for March.
"Despite the encouraging headline, there are few signs of relief in the durable goods sector," commented Oren Klachkin, Nationwide Financial Markets Economist. "Any positive takeaway from April's data is overshadowed by the downward revisions of previous months."
The unforeseen rise in durable goods orders was partly due to sustained demand for transportation equipment, which saw a 1.2 percent increase in April, building on March's 2.5 percent gain.
However, this was balanced by a notable 8.0 percent drop in orders for non-defense aircraft and parts, following a sharp rise the previous month. Conversely, orders for defense aircraft and parts saw a 2.5 percent increase, and orders for motor vehicles and parts climbed by 1.5 percent.
Excluding transportation equipment, durable goods orders increased by 0.4 percent in April, following a stagnant March. This was higher than the expected 0.1 percent rise. There was notable growth in orders for primary metals and electrical equipment, appliances, and components, with increases also observed in orders for computers and electronic products, machinery, and fabricated metal products.
Additionally, the report highlighted that orders for non-defense capital goods excluding aircraft—a key metric of business investment—rose by 0.3 percent in April after a slight 0.1 percent decline in March. Shipments in this category, which directly influence equipment investment data for GDP calculations, increased by 0.4 percent in April, following a 0.3 percent decrease in March.