ATMs are stored at the Diebold Inc. manufacturing facility in Greensboro, North Carolina, U.S.Ty Wright/Bloomberg
U.S. orders for long-lasting manufactured goods dropped in April for the first time in five months, and a key category that tracks business investment went nowhere for the second straight month.
The Commerce Department said Friday that durable goods orders fell 0.7 per cent in April after rising 2.3 per cent in March. The April downturn was the first since durable goods orders fell 4.6 per cent in November.
Despite the April drop, American manufacturing has bounced back in recent months from a slump early last year.
Orders for transportation equipment fell 1.2 per cent last month, pulled down by a 9.2 per cent drop in the volatile commercial aircraft category. Orders for military aircraft jumped 7.1 per cent. But orders for cars, trucks and auto parts rose 0.3 per cent last month after falling in February and March.
Orders for capital goods, excluding aircraft and military equipment, were flat for the second straight month – potentially worrisome because that category offers clues about where business investment is headed.
Durable goods, ranging from refrigerators to battleships, are items meant to last at least three years.
Overall, American manufacturing has regained momentum after being hurt early last year and in late 2015 by cutbacks in the energy industry and a strong dollar that makes U.S. products pricier overseas. The Institute for Supply Management, a trade group of purchasing managers, reported earlier this month that its manufacturing index showed U.S. factories expanding in April for the eighth straight month.
The Labor Department says factories have added jobs for five straight months. And the Federal Reserve reported earlier that American industry – factories, mines and utilities – expanded production last month at the fastest pace in more than three years.