U.S. orders for durable goods may have fallen in April after the biggest back-to-back gains in 12 years, as bookings for commercial aircraft slowed, according to a survey of economists before a government report. Orders for machinery, electronics and other big-ticket items made to last at least three years may have fallen 0.9 percent last month after rising 5 percent in March and 3.9 percent in February, based on the median estimate of 64 economists in a Bloomberg News survey. The two-month gain was the biggest since March-April 1992.
Factories hired more workers last month than at any time in almost four years and inventories in March were at record lows compared with sales, government reports have shown. Rising demand and lean inventories suggest the pace of bookings will rebound as businesses try to keep up with sales. ``It doesn't look like we are setting up for a big falloff in orders,'' said Tim Rogers, chief economist at Briefing.com in Boston. ``The outlook is extraordinarily strong for business investment this year. Manufacturing is more than just back on its feet, it's running strong.''
The Commerce Department is scheduled to issue the durable goods report at 8:30 a.m. today in Washington. Excluding bookings for transportation equipment, orders are projected to drop 1 percent, according to the median estimate. Durable goods orders are among the most volatile economic indicators. The last time such bookings rose for three consecutive months was from January through March of 1999.
Boeing Orders
A decline in orders at Boeing Co., the world's second- biggest maker of airplanes, contributed to the expected decline in bookings last month, according to Bill Sharp, an economist at J.P. Morgan Securities Inc. in New York. Chicago-based Boeing received orders for just two aircraft last month compared with 20 in March. Bookings for commercial aircraft increased 13 percent in March after surging 34 percent in February, according to Commerce Department figures. Airplane orders may rebound this month. AirTran Airways Inc., a U.S. low-cost airline, last week ordered six Boeing Co. 717 airplanes to expand its fleet and meet demand for cheap flights. Boeing valued the contract at $225 million at list prices. A separate Commerce report on new home sales in April is scheduled for release at 10 a.m. today. New houses in the U.S. may have sold at a 1.2 million annual pace in April, matching the second highest on record, as the prospect of further increases in borrowing costs spurred buying, a survey of economists showed.
Highest Ever
Estimated sales last month, based on the median projection of 58 economists, follows a record 1.228 million annual pace the government reported for March and equals the June level. Sales for all of last year totaled 1.085 million, the highest ever. Accelerating economic growth has lifted borrowing costs almost a percentage point the past two months, and speculation that rates will continue to rise has led some people to buy now. Housing demand may start to cool in the second half of this year, economists said. ``Sales remain surprisingly buoyant in spite of rising interest rates,'' Joseph Abate, a senior economist at Lehman Brothers Inc. in New York, said. ``The last of the fence-sitters are diving into the market.'' ///www.bloomberg.com