Orders to U.S. factories for durable goods fell in April, but demand outside of the transportation sector jumped and a gauge of business investment rose sharply, suggesting surprising strength in the industrial sector. The Commerce Department reported Wednesday that orders for durable goods—expensive manufactured items expected to last at least three years—fell 0.5 percent last month after dropping 0.3 percent in March. Analysts had expected a 1.5 percent drop in April. Orders for transportation equipment fell 8 percent as demand for civilian aircraft plunged 24.4 percent and orders for cars fell 3.3 percent. However, excluding transpiration, orders rose by 2.5 percent, the biggest gain in nine months. Orders for electrical equipment and appliances jumped by 27.8 percent, the biggest increase on record, with strong demand also seen for primary metals, machinery, and communications equipment. Analysts said higher orders for electrical equipment and machinery reflected strong overseas demand, while the slump in car orders indicated a weak domestic economy and soaring gasoline prices. A closely watched gauge for business spending—non-defense capital goods orders excluding aircraft—rose a surprising 4.2 percent, the biggest gain since December.
