US durable goods orders rise less than expected in April

Orders at US factories for long-lasting goods inched slightly higher in April but came in below expectations as manufacturers confronted a worsening supply-chain crisis that continued to weigh on business investment.

Bookings for all durable goods – products that are intended to last at least three years – rose 0.4% last month, the Commerce Department reported on Wednesday. Economists surveyed by Refinitiv forecast a 0.6% increase. It followed a downwardly revised gain of 0.6% decline in March.


Passenger planes and autos – volatile measurements that tend to swing sharply month to month – fell 0.4% in April. A more precise measure of demand that excludes transportation and military hardware, known as core orders, climbed 0.3% in April, down from a 1.1% gain recorded in the previous month.

Supply chain container ships

A container ship is unloaded at the Virginia International Gateway terminal in Norfolk on May 10, 2019. (AP Photo/Steve Helber, File/AP Newsroom)

The figures suggest that business investment is still chugging along and that factories are producing large amounts of goods, even as they confront snarled supply chains, a labor shortage and the highest inflation in decades. It is unclear, however, whether persistently high inflationcoupled with rising interest rates and concerns over a slowing economy, will eventually force businesses to reconsider the current pace of investment.

There are some signs that manufacturing activity is slowing: A survey from the Federal Reserve Bank of Philadelphia released last week showed that a key gauge measuring manufacturing activity in the mid-Atlantic region posted the weakest growth since the early days of the coronavirus pandemic.

There is a growing sense of pessimism on Wall Street over concerns that the Fed may drag the economy into a recession as it seeks to tame inflation, which remained elevated at 8.3% in April. Bank of America, as well as Fannie Mae and Deutsche Bank, are among the Wall Street firms forecasting a downturn in the next two years, along with former Fed Chairman Ben Bernanke.

Federal Reserve Jerome Powell

Federal Reserve Chair Jerome Powell arrives to speak at a news conference, March 3, 2020, in Washington. (AP Photo/Jacquelyn Martin/AP Newsroom)

Economic growth in the US is already slowing. The Bureau of Labor Statistics reported earlier this month that gross domestic product unexpectedly shrank in the first quarter of the year, marking the worst performance since the spring of 2020, when the economy was still deep in the throes of the COVID-induced recession.

Fed Chairman Jerome Powell has acknowledged there could be some “pain associated” with reducing inflation and curbing demand but pushed back against the notion of an impending recession, identifying the labor market and strong consumer spending as bright spots in the economy. Still, he has warned that a soft landing is not assured.


“It will be challenging, it won’t be easy. No one here thinks that it will be easy. Nonetheless, we think there are pathways… for us to get there,” Powell said during an interview last week with Marketplace.

Leave a Comment

Your email address will not be published. Required fields are marked *