Orders for durable goods unexpectedly climbed for a third month in April, a sign U.S. factories will help the world’s biggest economy strengthen.
Bookings for goods meant to last at least three years rose 0.8 percent after a 3.6 percent gain in the prior month that was stronger than previously reported, Commerce Department figures showed today in Washington. The median forecast of 68 economists surveyed by Bloomberg called for a 0.7 percent drop. Orders excluding transportation equipment also advanced.
A pickup in growth is propelling orders for electrical equipment and computer networks, benefiting companies such as Cisco Systems Inc. (CSCO) and Whirlpool Corp. (WHR) Demand for cars and homes, together with the need to replace aging machinery, will underpin investment at the same time the global economy starts to improve.
“Manufacturing is one of the sectors that’s doing well, and it’ll contribute to growth,” Tom Simons, an economist at Jefferies LLC in New York, said before the report. “Orders will continue to grow in the next few months as pent-up demand gets released. We’re going to see some better activity on the manufacturing front.”
Estimates in the Bloomberg survey ranged from decline of 4.3 percent to a gain of 2 percent after previously reported 2.5 percent increase in March.
Stock-index futures maintained gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in June rising 0.4 percent to 1,905 at 8:38 a.m. in New York.
Excluding transportation equipment demand, which is often volatile, orders increased 0.1 percent after a 2.9 percent gain that was stronger than previously estimated. They were projected to be unchanged, according to the Bloomberg survey median.