Orders for manufactured durable goods in the United States rose $7.2 billion in April to $222.6 billion, according to the monthly “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders” released by the U.S. Census Bureau. The report measured the quantity of new orders on goods with an extended product life, ranging from airplanes to cars to refrigerators. This 3.3 percent increase is big news for the economy after disappointing numbers in March, when orders decreased 5.9 percent. Last year’s orders for long-lasting and future-oriented goods finished on a strong note, with increases seen across four consecutive months.
These orders point to long-term business development because they enhance manufacturers’ future production capacity. Businesses that purchase durable goods are able to produce more consumer products in the future. The significant increase in new orders shows that businesses are more willing to invest their resources into the future.
The largest increase in orders for durable goods was in transportation equipment, which rose by $5.1 billion in April – an 8.1 percent increase for the month. Total inventories of manufactured durable goods rose $1.3 billion to $377.9 billion.
The Census Bureau says this is the highest recorded inventory since it began using the North American Industry Classification System (NAICS) in 1992. A significant part of the increase in inventories came from transportation equipment, which has shown growth in 32 of the last 33 months.
Capital goods in both the defense and non-defense sectors witnessed an increase in new orders during April. New orders for defense capital goods increased 31.3 percent to $7.6 billion and, for non-defense, increased 3.3 percent to $76.1 billion.
In each of its monthly economic reports, the Census Bureau provides updates to previously published data (specifically data for the previous month). In its most recent report, it made several positive revisions on the data collected for March. It revised the numbers upward for total new orders on manufactured durable goods, shipments and total inventories. March’s total new orders were revised up by nearly $3 billion.
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