Orders for US-made, big-ticket manufactured goods continued their upward trend last month, though at a slower pace, driven primarily by demand for commercial aircraft, according to government data released Wednesday.
Durable goods orders rose 0.4 percent in April, the Commerce Department said, slightly less than what analysts had expected but still indicating positive momentum.
Orders have increased for six of the past seven months, though the gain in March was lower than originally reported, which analysts say show the US economy is on solid footing despite rising inflation pressures, which has prompted the Federal Reserve to begin raising interest rates aggressively to cool demand.
“We don’t believe the economy is on the cusp of a major slowdown,” said Oren Klachkin of Oxford Economics. “Domestic demand hasn’t majorly succumbed to the pressures of high inflation, rising interest rates, and enduring supply chain problems.”
“While it may take time for these headwinds to weigh on business and consumer activity, we think the economy’s fundamentals are strong enough to weather the storm in 2022,” he said.
A key driver of the increase was orders for nondefense aircraft and parts, which jumped 4.3 percent, while defense aircraft and parts increased one percent, according to the data — after both sectors plunged in March.
However, motor vehicles and parts dropped 0.2 percent, while overall transportation equipment rose 0.6 percent compared to the prior month.
Supply chain snarls, particularly semiconductor shortages have been weighing on multiple industries for months, and the report showed orders for communications equipment decreasing 1.3 percent, and computer products falling 0.7 percent.
Ian Shepherdson of Pantheon Macroeconomics cautioned that the numbers can be “erratic.”
“It’s entirely possible that the recent slowing is nothing more than a temporary reaction to the spike in energy prices; firms might be waiting to see how consumers respond,” he wrote in analysis. “So far, we see no evidence of any hit” with the exception of housing sales.
Excluding transportation, durable goods orders rose 0.3 percent in April, the report said.