Durable-Goods Orders Drop Sharply

Durable-goods orders posted a sharp drop in April, signaling that the manufacturing sector is still a soft spot in the economy.

New orders for manufactured durable goods fell 2.4% to $168.9 billion in April from $173.1 in March, according to numbers released Wednesday by the Commerce Department. The drop followed a revised 1.4% rise in March. Economists had estimated a decline of 1%, according to Briefing.com.

Orders for transportation equipment led the decline, falling 5.4% in April. Orders excluding transportation goods fell 1.2%, and orders excluding defense-related goods slipped 1.5%. The report showed drops in all categories except primary metals, civilian aircraft, and computers and related products. Orders for civilian aircraft jumped 48.6%.

Orders for durable goods are historically volatile, but this report, combined with other indicators measuring the health of American factories, points to a sector that continues to struggle with excess capacity and a customer base that is unwilling to spend.

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