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U.S. April Durable Goods Orders Fall 3.6%
By Shobhana Chandra – May 25, 2011 5:40 AM MT

Orders for U.S. durable goods dropped more than forecast in April, reflecting less demand for aircraft and disruptions in supplies of auto parts stemming from the earthquake in Japan.

Bookings for goods meant to last at least three years fell 3.6 percent, the most since October, after a 4.4 percent jump in March that was bigger than previously estimated, a Commerce Department report showed today in Washington. Economists projected a 2.5 percent drop in April orders, according to the median forecast in a Bloomberg News survey. A measure of demand for business equipment declined by the most this year.

Bookings for Boeing Co. (BA) aircraft slumped last month and vehicle makers slowed production due to a components shortage that may be short-lived as Japanese manufacturers recover. At the same time, rising overseas sales at Deere & Co. (DE) and General Electric Co. (GE) indicate factories will keep expanding.

There is “a slowing, but not a dramatic slowing in manufacturing,” Bricklin Dwyer, an economist at BNP Paribas in New York, said before the report. “The inventory rebuilding cycle has tapered off and now we have a normalization. Manufacturing will still be an important component of growth going forward.”

Orders excluding the volatile transportation equipment category decreased 1.5 percent in April after a 2.5 percent gain. The median projection in the Bloomberg survey was for a 0.5 percent rise.

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