COMPANIES placed fewer orders for computers, machinery and other capital equipment in April for a second month, indicating manufacturing in the U.S. is cooling.
BLOOMBERG FILE PHOTO/JIN LEE
By Timothy R. Homan Bloomberg News
WASHINGTON - Companies placed fewer orders for computers, machinery and other capital equipment in April for a second month, indicating manufacturing in the U.S. is cooling.
Bookings for non-military goods excluding aircraft fell 1.9 percent after dropping 2.2 percent in March, the first back-to- back decline in a year, the Commerce Department said today in Washington.
Other reports showed claims for jobless benefits were little changed last week and consumer confidence hovered near a four-month low.
“We can’t seem to really gather any steam,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “From consumer spending to hiring to manufacturing activity, everything is kind of moderate and OK but not particularly spectacular or satisfying.”
Slowdowns in Europe and parts of Asia combined with a cooling in business spending in the U.S. after the reduction of a government tax credit this year may restrain manufacturing.
At the same time, Americans are buying cars at the fastest pace in four years, creating a rebound in auto making that is rippling through the economy.
Applications for jobless benefits decreased by 2,000 to 370,000 in the week ended May 19, in line with the median forecast of economists surveyed by Bloomberg News, according to data from the Labor Department.
Consumer confidence improved last week for the first time in a month as falling gasoline prices helped stem dismay over household finances, another report showed.
The Bloomberg Consumer Comfort Index was minus 42 in the seven days ended May 20 compared with a four-month low of minus 43.6 the prior period.
The measure slumped 12.2 points over the previous four weeks, wiping out almost the entire gain for the year.
Stocks rose, sending the Standard & Poor’s 500 Index higher for a fourth day, as a rally in Hewlett-Packard Co. overshadowed the slowdown in orders.
The S&P 500 climbed 0.2 percent to 1,321.45 at 11:30 a.m. in New York.
Even with a slowdown, the U.S. factories stand out as a source of strength among global producers. Euro-area manufacturing slumped to a 35-month low, while factories in China contracted for a seventh straight time in May, according to separate data today.
Business confidence in Germany declined, while Britain’s economic contraction in the first quarter was deeper than previously estimated, other reports showed.
Demand for all U.S. durable goods, those meant to last at least three years, rose 0.2 percent, today’s report showed, matching the median forecast in a Bloomberg survey.
Estimates of the 75 economists surveyed ranged from a drop of 2.8 percent to a 4.2 percent gain.
The Commerce Department revised the March reading to a 3.7 percent decline from a previously estimated 3.9 percent drop.
Bookings for non-defense capital goods excluding aircraft are considered a proxy for future business investment in items such as computers, engines and communications gear.
Today’s report showed shipments of such goods, used in calculating gross domestic product, decreased 1.4 percent in April after rising 1.9 percent the previous month.
Economists at Morgan Stanley in New York reduced their estimate for growth this quarter to a 2.4 percent annual rate from 2.7 percent previously based on the slowdown in shipments combined with figures showing a smaller-than-expected gain in inventories.