US sees jump in durable goods orders
Washington, May 25, 2013
Orders for long-lasting US manufactured goods rose more than expected in April, a hopeful sign that a sharp slowdown in factory output could soon run its course.
New orders for durable goods, which range from toasters to aircraft, increased 3.3 per cent last month, the Commerce Department said yesterday.
The data was the latest to show the US economy exhibiting surprising resilience in the face of harsh fiscal austerity measures enacted this year.
"(It's) another sign that growth is holding up quite well," said Paul Ashworth, an economist at Capital Economics in Toronto.
While Washington increased taxes in January and sweeping budget cuts began in March, consumer spending has looked relatively robust and many economists think the US Federal Reserve could begin tapering a monetary stimulus programme by the end of the year.
Economists polled by Reuters had expected new orders for durable goods, which are meant to last three years or more, to rise 1.5 per cent last month.
The Commerce Department also revised prior readings for orders to show a smaller decline in March than previously estimated.
Data earlier this month showed US factory output fell in April for the second straight month, hurt by the European debt crisis which has weighed on demand at factories from Los Angeles to Shanghai.
Yesterday's report showed a measure of underlying demand in the factory sector, which strips out aircraft and military goods and is an indicator of future business spending, advanced 1.2 per cent.
That was a faster clip than analysts had expected.
Even if that signals a return to growth in the factory sector, economists expect government austerity will nevertheless sap strength from the economy as the year progresses.
"While (Friday's data) was definitely better than expected, I would not mistake this for rip-roaring strength," said Stephen Stanley, an economist at Pierpont Securities in Stamford, Connecticut.
Shipments of core capital goods, which go into calculations of equipment and software spending in the gross domestic product report, fell 1.5 per cent.-Reuters