Orders of big-ticket US manufactured goods fell in April for the first time after 11 months of increases, dropping 1.3 percent, according to government data released Thursday.
The $3.2 billion decline, which defied expectations for another increase, was driven by a 6.7 percent drop in transportation equipment, the Commerce Department reported.
The drop marks a disappointing start to the second quarter after the US economy grew 6.4 percent in the first three months of the year as the recovery from the Covid-19 pandemic picked up speed, the Commerce Department confirmed in a separate report. That result was unchanged from the initial estimate.
"Despite disappointing economic data in April, we still foresee the US economy's first quarter bloom turning into a summer boom," said Gregory Daco of Oxford Economics, who predicts US growth this year of 7.7 percent, the strongest since 1951.
"While the economic environment is ripe for naïve and misguided narratives, we should remember the economic recovery from the pandemic-induced shutdown will be bumpy," he said.
Excluding the often volatile transportation sector, new orders for durable goods increased 1 percent in April, according to the data.
The transportation component was dragged down by falling orders for motor vehicle and parts as well for military aircraft, which were offset by the 17.4 percent jump in civilian aircraft and parts.
Auto manufacturing has been held back this yearby a global shortage of semiconductors, and Ian Shepherdson of Pantheon Macroeconomics said "it's a fair bet that chip shortages are responsible for much of weakness in the vehicle sector."