April US Durable Goods Orders Fall 1.3%

The unexpected decrease was the first drop in 11 months.

In this aerial photo, a General Motors assembly plant is seen at top right while mid-sized pickup trucks and full-size vans currently produced at the plant are seen in a parking lot outside on March 24 in Wentzville, Mo.
In this aerial photo, a General Motors assembly plant is seen at top right while mid-sized pickup trucks and full-size vans currently produced at the plant are seen in a parking lot outside on March 24 in Wentzville, Mo.
AP Photo/Jeff Roberson

WASHINGTON (AP) β€” U.S. orders for big-ticket manufactured goods dropped unexpectedly in April for the first time in 11 months as a shortage of computer chips disrupted auto production.

The Commerce Department reported Thursday that orders for factory goods meant to last at least three years fell 1.3% in April after rising 1.3% in March. Transportation orders skidded 6.7%. Excluding transportation, which can swing sharply from month to month, durable goods orders were up 1% in April.

Factories have been hamstrung by a shortage of supplies as the U.S. economy reopens from the COVID-19 pandemic and demand for goods and services rebounds rapidly. Orders for auto parts, disrupted by a shortage of computer chips, dropped 6.2% in April. Orders for military capital goods dropped 25.8% after falling 11.7% in March.

Economists had expected durable goods orders to rise about 0.7% last month. Despite the unexpected decline, the April report also contained hopeful signs: A category that tracks business investment β€” orders for nondefense capital goods excluding aircraft β€” increased 2.3% last month on top of a 1.6% gain in March.

β€œThe signal for the manufacturing sector is still positive, although supply chain constraints continue to be a headwind, preventing a complete recovery to pre-pandemic levels," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note.

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