April Durable Goods Preview
April Durable Goods orders are expected to fall 1.5% following a 0.3% decline in March. Analysts have a wide range of estimates for the April Durable Goods data, from down 5% to up 0.6%, though most expect a negative reading over the month.
Durables Goods Ex-Transports are expected to fall 0.5% after gaining 0.9% the prior month. Durable Goods Shipments are expected to fall 1.5% following a 0.3% decline in March, while Durable Goods Inventories in April are expected to increase 0.3% following a 1% March increase.
A reduction in overall aircraft orders in April adds further downside potential to the April estimates. Boeing reported a total of 99 plane orders in March but reported a mere 58 plane orders in April. This decline, combined with generally weak market conditions, is likely to weigh on durable goods performance in April.
Further complicating durable goods sector performance in April will be the extensive labor issues between GM and American Axel. AA’s strike, which ended Friday, threatened to push US auto production its lowest levels since 1998 (when another strike thwarted production). Vehicle shipments were down 4.7% in March following a 2.3% decline in February.
Related data:
* The April Industrial Production report showed a 1.4% drop in durable goods manufacturing.
* The April Employment Report showed a 1.2% decline in aggregate manufacturing hours worked.
* The production component in the April ISM Manufacturing Survey improved to 49.1 from 48.7 in March.