CNNMoney.com
Companies Economy International Corrections Pre-market Trading After-hours Trading Winners/Losers/Actives Bonds Currencies Commodities World Markets Money Magazine Real Estate Taxes Jobs Ask the Expert Money 101 Autos Mutual Funds The Help Desk Loan Center Best Places to Live Ask the Expert Ultimate Guide to Retirement Retirement Calculators Rules of Retirement Best Funds Best Places to Retire Fortune Brainstorm Tech Apple 2.0 Blog Big Tech Blog Sectors and Stocks Tech Talk Resource Guide Small Business Makeovers Questions & Answers Small Business Video 100 Best Places to Launch FSB 100 Fortune Small Business Fortune 500 Brainstorm Tech Investing Management C-Suite Rankings Main Create Portfolio Edit Portfolio Create Alerts Edit Alerts

New orders for big-ticket items decline

Census Bureau says spending on manufactured durable goods fell 0.5% in April.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Catherine Clifford, CNNMoney.com staff writer

When did you first start saving money?
  • Before I turned 18
  • In my 20s or 30s
  • After 40
  • Any day now

NEW YORK (CNNMoney.com) -- New orders for manufactured big-ticket items decreased in April, according to a government report issued Wednesday, but the decline was not nearly as severe as economists expected.

The U.S. Census Bureau said that new orders for durable goods fell 0.5% to $214.4 billion. This was the third decrease in four months and followed a revised 0.3% decrease in March.

Economists surveyed by Briefing.com expected a 1.5% decline in big-ticket new orders.

"While not big-time expansionary, it is not recessionary either," said Tim Quinlan, economist at Wachovia Economics Group.

Excluding transportation, new orders increased 2.5%. Excluding defense, new orders decreased 0.3%.

Nondefense new orders for capital goods in April decreased 1.4% to $74.4 billion. Defense new orders for capital goods, on the other hand, increased by 4.8% to $8.8 billion.

With consumer spending slowing down, the health of the economy is increasingly dependent on businesses pumping dollars into the sagging U.S. economy.

"The consumer is certainly the lion's share of GDP," said Quinlan. "But at the margin, business spending becomes very important."

Considering big ticket spending while excluding both volatile aircraft and war spending provides a good proxy for general business spending. New orders for capital expenditures that are not defense-related or aircraft increased by 4.2%.

"You got a lot of noise in the headline number from transportation," said Quinlan. "So when you exclude that, it will give you a sense of how American manufacturing is doing in general."

Shipments of manufactured durable goods in April increased 1.2% to $212.2 billion, following two consecutive monthly decreases. This followed a 0.9% decrease in March.

The weak dollar has supported exports. Products made in the United States and sold in dollars seem cheaper to other countries because of the low valuation of the greenback, said Quinlan.

Unfilled orders for manufactured durable goods have been up 26 of the last 27 months, and increased 1% to $804.5 billion in April.

Inventories of manufactured durable goods, up nine of the last ten months, also increased in April by 0.5% to $328.6 billion.

While economists see a benefit in an increase in unfilled orders, which indicate that there is work in the pipeline to keep factories and workers busy, they believe it would be better for the economy for inventory levels to be low.

"Your stockpiles are building, so at some point you may have to cut production to cut down inventory stockpiles," said Quinlan.  To top of page

Features
Markets Last Change
Dow Jones 10,520.10 53.66 / 0.51%
Nasdaq 2,285.69 16.05 / 0.71%
S&P 500 1,126.48 5.89 / 0.53%
10-year Bond 96 15/32 Yield: 3.80%
U.S.Dollar 1 euro = $1.438 0.000
December 24, 2009 12:00 AM ET
CompanyPrice% Change
YRC Worldwide Inc 1.01 6.23%
Freddie Mac 1.26 -3.82%
US Airways Group Inc 5.35 3.50%
Allegheny Technologies Inc 45.68 3.30%
Dec 24 12:43pm ET †
Biggest losers: Where Americans aren't moving Through most of the decade Florida was one of the fastest growing states. But the sunny clime -- and 6 others -- lost more residents than they gained in the year ended July 1. More
8 hot cars: Class of 2000 In just 10 years, the market's changed a lot when it comes to cars. Where are these models now? The Prius became a hit; the Aztek got killed. More
Obama's Main Street favorites President Obama meets often with small business owners, peppering his speeches with their stories. We checked in with 6 entrepreneurs touted by the President to find out how they handle health care. More

Sponsors

© 2009 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy. Advertising Practices.
Copyright © 2009 BigCharts.com Inc. All rights reserved. Please see our Terms of Use.
MarketWatch, the MarketWatch logo, and BigCharts are registered trademarks of MarketWatch, Inc.
Intraday data provided by Interactive Data Real-Time Services and subject to the Terms of Use.
Intraday data is at least 20-minutes delayed. All times are ET.
Historical, current end-of-day data, and splits data provided by Interactive Data Pricing and Reference Data.
Fundamental data provided by Morningstar, Inc..
SEC Filings data provided by Edgar Online Inc..
Earnings data provided by FactSet CallStreet, LLC.