US Factory Orders Nudge Lower as Demand for Nondurable Goods Declines

US factory orders fell in line with analysts’ estimates in April as a decline in demand for durable goods offset rising orders of nondurable items, which were bolstered by petroleum and coal.

New orders for manufactured goods decreased by 0.8% to $499.3 billion in April, according to data published by the Census Bureau. This marked a departure from the revised reading of 1.3% growth in March to $503.3 billion but was in line with the consensus estimate of analysts polled by Econoday.

Shipments fell for the first time in three months, decreasing by 0.5% to $504.1 billion following a 0.2% increase in March. Durable goods shipments fell 1.5% to $253.4 billion with transportation leading the decrease, declining 4.1% for a fourth consecutive month of declines. Nondurable goods shipments rose 0.5% to $250.7 billion, with petroleum and coal products up 2% in the month.

Unfilled orders, which were down in two of the last three months, decreased by 0.1% to $1.18 trillion. The unfilled orders-to-shipments ratio rose to 6.69 from 6.61 in March. Inventories, which have been up for seven of the last eight months, increased by 0.3% and the inventories-to-shipments ratio was 1.37, up from 1.36 in March.

New orders for manufactured nondurable goods increased 0.5% to $250.7 billion while orders for durable goods fell 2.1% to $248.6 billion.

In analysis of the report, Econoday said the change in core capital goods — nondefense ex-aircraft — had been “very weak,” down 1% for orders and unchanged for shipments. “Both readings hint at slowing for second-quarter business investment. General weakness is evident in the market breakdown with orders for primary metals, fabrications, machinery, and new vehicles all weak.”