U.S. durable-goods orders fall 17.2% in April

U.S. orders for durable goods plunged 17.2% in April, the government said Thursday, offering a fresh sign of how the coronavirus crisis has hammered the U.S. economy.

Economists polled by MarketWatch had expected a tumble of 18.2%.

A key measure of business investment known as core orders fell 5.8% vs. forecasts for a decline of 15.4%. These orders exclude defense and transportation.

In March, durable-goods orders plunged 16.6%, according to revised figures.

Key details: Orders for durable goods now have decreased in three out of the past four months, the government said.

In April, orders for transportation equipment led the drop with a fall of 47.3%.

What they’re saying: “While the decline in durable-goods orders in April wasn’t quite as bad as expected, the opening up of capacity in the industrial sector and continued struggles in aviation industry will likely mean the rebound in the second half of the year in business investment lags behind other areas of the economy,” said CIBC economists Andrew Grantham and Katherine Judge in a note.

“Overall, a marginally better round of economic data than feared, but by no means ‘good news’ — rather just less bad,” said Ian Lyngen, managing director and head of U.S. rates strategy at BMO Capital Markets, referring to Thursday’s releases on durable goods, weekly jobless claims and gross domestic product for the first quarter.

The big picture: The spread of the coronavirus causing the disease COVID-19 has been forcing people to stay home and worry about their jobs, rather than make purchases of expensive goods.
The decline in durable-goods orders last month was the second largest that the government has ever recorded since it began tracking such orders in the early 1990s.

The only other time the U.S. suffered a bigger drop was in August 2014, when they fell 18% because of an unusually large decline in orders for Boeing passenger planes. Boeing had gotten a huge number of orders just the month before.