Despite the biggest rise in orders for big-ticket manufactured goods since the recession began, American factories in April saw little to cheer about, according to a new report.
At best, it suggests that US manufacturers of cars, airplanes, refrigerators, and other durable goods could be regaining their footing after more than a year of recession.
New orders for manufactured durable goods rose 1.9 percent in April, the Commerce Department reported Thursday. But that rise was skewed by a huge increase in defense orders. Absent that, new orders actually fell 2.0 percent, slightly higher than the January level, which was the lowest since 1995.
Factories made some small progress in whittling down inventories: down 0.8 percent in April. But the overhang is still large. As inventories fall, companies will have to make more goods to fill new orders – a good sign for the economy.In another sign of ongoing stress, current shipments of durable goods fell 0.2 percent, the ninth consecutive decline and the longest since the federal government began tracking the data in its current form in 1992.
"Overall, this is not an encouraging report," wrote Brian Bethune, chief US financial economist at Global Insight, in a commentary. "We should not look for capital investment to provide much of a spark in the short term for the long-awaited recovery of the economy."