US durable goods posts modest gain – Weekly jobless claims rise 14,000; 4-week average falls

This news has been read 8592 times!

This file photo shows a Boeing 737 aircraft during the manufacturing process at Boeing’s 737 airplane factory in Renton, Washington. US aircraft sales forged higher in March, helping drive up orders for manufactured goods, but the pace of growth slowed from previous months, the Commerce Department reported April 27.

WASHINGTON, April 27, (RTRS): New orders for key US-made capital goods rose less than expected in March, but a second straight monthly increase in shipments suggested business investment accelerated in the first quarter amid a recovering energy sector.

While other data on Thursday showed a bigger-than-expected increase in first-time applications for unemployment benefits last week, the trend remained consistent with tightening labor market conditions.

The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.2 percent last month after gaining 0.1 percent in February.

Shipments of these so-called core capital goods rose 0.4 percent after jumping 1.1 percent in February. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

Economists had forecast core capital goods orders rising 0.5 percent last month. March’s modest increase suggests a loss of momentum in the manufacturing sector after recent strong growth.

Manufacturing, which accounts for about 12 percent of the US economy, is being underpinned by the energy sector revival.

Energy services firm Baker Hughes said last Friday that US oil rigs totaled 688 in the week ending April 21, the most in two years. US drillers have added oil rigs for 14 straight weeks and shale production in May was set for its biggest monthly increase in more than two years.

Business spending on equipment is expected to have accelerated from the fourth-quarter’s annualized 1.9 percent growth pace and will likely be one of the few bright spots when the government publishes its advance first-quarter GDP estimate on Friday.

The Atlanta Federal Reserve is forecasting GDP increasing at a 0.5 percent rate in the first quarter, a sharp slowdown from the fourth-quarter’s 2.1 percent pace. With the labor market near full employment, the anticipated slowdown in growth likely understates the health of the economy.

In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 257,000 for the week ended April 22.

Claims have now been below 300,000, a threshold associated with a healthy labor market, for 112 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller.

Economists had forecast first-time applications for jobless benefits rising to 245,000 last week. Claims, however, tend to be volatile around this time of the year because of the different timings of spring and Easter holidays.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 500 to 242,250 last week, the lowest level since February.

US financial markets were little moved by the data.

Manufacturing could get a lift from President Donald Trump’s proposed tax plan, announced on Wednesday, that includes cutting the corporate income tax rate to 15 percent from 35 percent.

Last month, orders for machinery slipped 0.2 percent, but shipments increased 0.7 percent. Orders for primary metals rose in March as did shipments of these products. Electrical equipment, appliances and components orders and shipments also increased last month.

There were, however, declines in orders for fabricated metal products and computers and electronic products.

Last month, overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, increased 0.7 percent after surging 2.3 percent in February. Civilian aircraft orders increased 7.0 percent.

Orders for motor vehicles and parts fell 0.8 percent, declining for a second straight month.

This news has been read 8592 times!

Related Articles

Back to top button

Advt Blocker Detected

Kindly disable the Ad blocker

Verified by MonsterInsights