Orders for U.S. Durable Goods Increase More Than Forecast

thenews 2013.05.24 10:53

Orders for U.S. durable goods increased more than forecast in April, pointing to gains in business investment that will help manufacturing rebound in the second half of the year.

Bookings for equipment meant to last at least three years increased 3.3 percent last month after dropping 5.9 percent in March, the Commerce Department said today in Washington. The median forecast from 78 economists surveyed by Bloomberg projected a 1.5 percent increase.

Quickening activity in the housing and auto industries may ripple throughout manufacturing, rendering the economy better able to recover from a slowdown this quarter. At the same time, government cutbacks, higher taxes on consumers and cooling exports are crimping demand, which means any acceleration will be slow to develop.

“In the near term, manufacturing is entering a soft patch, but by the second half of the year, we should see some of that softness fade, whether it’s because global growth is picking up, construction drives machinery sales or autos do well,” Joshua Dennerlein, an economist at Bank of America Corp. in New York, said before the report. “This could quash some fears about a manufacturing slowdown.”