U.S. Durable Goods Orders Plunge 6.3% In April As Aircraft Orders Plummet

(RTTNews) - With orders for transportation equipment pulling back sharply, the Commerce Department released a report on Tuesday showing a steep drop by new orders for U.S. manufactured durable goods in the month of April.

The Commerce Department said durable goods orders tumbled by 6.3 percent in April after surging by a downwardly revised 7.6 percent in March.

Economists had expected durable goods orders to plunge by 7.9 percent compared to the 9.2 percent spike that had been reported for the previous month.

"Durable goods orders in April didn't decline as much as anticipated, but the underlying trend in equipment demand is weak amid policy uncertainty and a fading boost from tariff front-running in certain sectors," said Bernard Yaros, Lead U.S. Economist at Oxford Economics.

The sharp pullback by durable goods orders came as orders for transportation equipment nosedived by 17.1 percent in April after soaring by 23.5 percent in March.

Orders for non-defense aircraft and parts led the way lower, plummeting by 51.5 percent in April after skyrocketing by 158.5 percent in March.

Excluding the steep drop by orders for transportation equipment, durable goods orders rose by 0.2 percent in May after dipping by 0.2 percent in April. Ex-transportation orders were expected to edge down by 0.1 percent.

The unexpected uptick by ex-transportation orders reflected increases by orders for fabricated metal products, machinery and computers and electronic products.

Meanwhile, the Commerce Department said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, slumped by 1.3 percent in April after rising by 0.3 percent in March.

Shipments in the same category, which is the source data for equipment investment in GDP, edged down by 0.1 percent in April after climbing by 0.5 percent in the previous month.