US manufactured goods orders jumped unexpectedly in April

ORDERS of big-ticket manufactured items defied expectations to rise again in April, fuelled by a sharp rise in orders for defense aircraft, according to US government data released on Friday (May 26).

Manufactured durable goods rose by 1.1 per cent in April from a month earlier to US$283.0 billion, the Commerce Department said.

April’s figure built on a revised monthly increase of 3.3 per cent in March, and was far stronger than the median forecast of a 0.8 per cent decline in a MarketWatch survey of economists.

The largest factor behind the surprise rise in durable goods orders was defense spending, with new orders of defense aircraft and parts increasing by almost a third from a month earlier.

Orders for transportation equipment also increased, while those for non-defense aircraft and computers posted monthly declines.

While the April data for durable goods orders was better than expected, downside risks remain going forward “given the hurdles companies are facing not only from higher borrowing costs, but also a further tightening in credit conditions going forward,” High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients. AFP