Businesses cut back on their orders for heavy machinery, computers, autos and airplanes in April, reducing demand for long-lasting manufactured goods by the largest amount in six months, The Associated Press reports.
Orders for durable goods fell 3.8 percent and a key category that serves as a proxy for business investment was down 2.8 percent, the Commerce Department reported Wednesday.
The weakness was widespread across a number of industries and likely was influenced by supply chain disruptions stemming from the Japanese earthquake in March. Demand for motor vehicles and parts, an industry heavily dependent on Japanese component parts, saw a decline in orders of 4.4 percent in April, the biggest drop since last August.
Jennifer Lee, senior economist at BMO Capital Markets, said that the April durable goods report was just another sign that “the U.S. economy is encountering its fair share of speed bumps” at the moment.
The April decline left orders at $189.9 billion in April, still 18.3 percent above the recession low hit in March 2009.
The big drop in April came following a 4.4 percent increase in March, a gain that was revised up from a previously reported 2.9 percent increase.
