Weak aircraft, auto sales push key US data to 9-month low
Sales of US-manufactured goods were unexpectedly weak in April, hitting the lowest level in nine months, as American companies sold fewer cars, planes and factory equipment, according to data released Friday.
And sales in March were not as robust as originally reported, due to a sharp downward revision to aircraft sales.
That takes the some of the shine off the unexpected jump in economic growth in the first three months of the year, which President Donald Trump has hailed as proof his economic policies are working.
But Trump's trade war with China and other trading partners is overshadowing the outlook.
The disappointing Commerce Department data on durable goods sales for April marked a subdued start to the second quarter of 2019, which is expected to show a slowdown in economic activity.
Although a sales dip in April was expected due to the crisis at aviation giant Boeing -- which was forced suspended deliveries of a top-selling jet after deadly crashes -- orders for jets fell even faster than expected.
Auto sales also dropped sharply and a category seen as a proxy for business investment fell.
New orders for big-ticket manufactured items fell 2.1 percent for April to $248.4 billion, the lowest since July of last year, putting sales down in two of the last three months, the Commerce Department reported.
Economists had expected a two percent drop. Sales are still two percent higher in the first four months of 2019 compared to the same period last year.
Auto sales sank 3.4 percent while civilian aircraft orders -- a volatile category in the best of times -- plunged 25.1 percent, following a major reduction to the March sales figures.
Excluding transportation, sales were flat, after two months of declines, undershooting economists' expectations for a token 0.2 percent rebound.
Meanwhile, orders for primary metals, telecommunications equipment and non-defense capital goods -- a measure that can track oil prices and companies' plans for expansion -- all fell.
The White House made boosting capital expenditures by businesses a central argument for the 2017 tax cuts, claiming it would boost productivity and employment by freeing up resources for manufacturers to build factories.
Sales of defense items were a bright spot, rising 4.8 percent.
Jim O'Sullivan of High Frequency Economics said the trend in the data was not as weak as the April figures alone would suggest "but there has been significant slowing."
April was flat compared to the same month last year, whereas a year ago, the 12-month change was as high as nine percent, he said.
"The manufacturing sector is disproportionately exposed to weakening foreign demand," he said in a client note.
? 2019 AFP