Durable Goods Orders Fall 0.6% in March
A drop in durable goods orders, which are manufactured goods expected to last at least three years, will eventually reduce the amount of goods produced by U.S. factories for shipment by truck.
The decrease in orders to $173.4 billion followed a revised 2.7% increase in February. Analysts were expecting durables to slip 0.2% in March after 3 straight monthly increases, Reuters said.
This month’s report does not include numbers from semiconductors because many chip makers declined to supply data. Based on February’s data, semiconductors accounted for 3% to 3.5% of durable orders, Commerce said. In the future, the report will no longer include information on semiconductors.
Orders fell 1.6% for transportation equipment such as automobiles, ships and tanks after an 11.2% in February while orders for autos and parts alone fell 2.6%.
Excluding orders for transportation equipment — which can swing a lot from month to month — orders fell 0.1%. Orders excluding defense fell 1.2%, the biggest decline since a 10.9% drop in September.
In recent weeks, other economic reports from the Federal Reserve Bank of Philadelphia and Institute for Supply Management have shown the manufacturing sector awakening from slump dating back to the summer of 2000. However, one analyst told Bloomberg that managers are fearful of over-ordering as they did as the start of the recession, and are waiting to see more proof that business and consumer spending will pick up.
However, Commerce said that inventories of durable goods fell 1.1% in March, the 14th straight decline, which is a sign that factories will eventually have to boost production to meet demand.
