Orders placed with American factories rose less than forecast in April, while gains in capital-goods spending may presage stronger business investment in coming months.
Bookings increased 0.3 percent, following a 4.1 percent gain in March, the Commerce Department said today in Washington. Excluding transportation equipment, orders gained 0.7 percent after a 2.4 percent gain in March.
The slowdown in orders may be temporary, economists said. Demand is likely to pick up as the economy recovers from the slowest expansion in more than four years, they added. The signs of a rebound in business spending are consistent with the Federal Reserve's projection of faster growth later this year and into 2008.
``There's been a lot of concern about business spending, but it seems like we're slowly inching away from the cliff,'' said Drew Matus, a senior economist at Lehman Brothers Holdings Inc. in New York. ``These numbers support the idea of better growth in the second quarter, and if this continues it supports the Fed's view of a better second half.''
Here's a link to the report.
From the report:
New orders for manufactured durable goods in April, up five of the last six months, increased $1.8 billion or 0.8 percent to $218.5 billion, revised from the previously published 0.6 percent increase. This followed a 5.1 percent March increase.
New orders for manufactured nondurable goods decreased $0.5 billion or 0.2 percent to $199.6 billion.
For the last three months, unfilled orders are up .5%, .6% and .7%. I should add that I am not a big fan of this statistic because it's pretty easy to cancel orders. But the market likes when unfilled orders increases because it indicates factories may have more future work to do.
While this number came in below the market's expectations, it's still a good number. It plays into the "business is increasing it's spending" theme that seems to exist right now.