Durable Goods Orders Rise for Fifth Straight Month

The Commerce Department said Thursday U.S. orders for durable goods rose 1.1% in April, while revising the March figure upward from a 0.6% decrease to a 0.2% increase.

A rise in orders for durable goods, which are manufactured goods expected to last at least three years, will eventually increase the amount of goods produced by U.S. factories for shipment by truck.

Also Thursday, the Labor Department said that initial jobless claims dropped by 9,000 to 416,000, an eight-week low. (Click here for the full story.)

Meanwhile, Commerce said the 1.1% jump in durable orders to $176.6 billion, the fifth straight monthly increase, reflects a higher demand for vehicles, machinery and appliances. Excluding transportation equipment, orders rose 2.9% in April, the largest increase in six months, after rising a revised 0.8% the month before.

Looking ahead, low interest rates should motivate consumers, whose spending accounts for two-thirds of all economic activity, to continue to buy and for businesses to step up investment, the Associated Press reported. That would help strength the U.S. economy.

Analysts had expected April durable goods orders to rise 0.5% and 1% excluding transportation orders, Bloomberg reported.

Orders for vehicles and parts surged 12% in April, the biggest increase since 1998, and have prompted some manufacturers to increase production, Bloomberg noted. Machinery orders increased 4% and orders for appliances and electrical equipment rose 7.6%

The report also showed that inventories of durable goods fell 0.3% in April while shipments rose 3.5%.