U.S. Factory Orders Suffer Setback in April

Decline of 1.8% is biggest since January. Commercial, military aircraft orders show substantial weakness.

By Martin Crutsinger
Associated Press

WASHINGTON (AP) - Orders to U.S. factories fell in April, their biggest setback in three months and another sign of slowing economic activity in the spring.

The Commerce Department reported Friday that demand for manufactured goods dropped by $7.4 billion to $397.98 billion in April, a decline of 1.8% from the March level. It was the largest decline since a 2.7% fall in factory orders in January.

The weakness was led by a big drop in orders for commercial aircraft, which plunged by 29.1%, and military aircraft, which fell by 26.9%. But there was weakness in a number of other manufacturing areas, with demand for computers and other electronic products down 10.8% and orders for construction machinery off by 2.5%from their March levels.

The report on factory orders was the latest signal that the economy was apparently shifting to a slower pace in the spring after turning in a sizzling growth rate in the January-March quarter.

The Labor Department reported Friday that businesses added just 75,000 workers to their payrolls in May, the weakest showing since the economy was being battered by the Gulf Coast hurricanes last fall.

Orders for durable goods, items expected to last at least three years, fell by a sharp 4.4%, the biggest drop since January. This estimate represented a slight revision from a preliminary report last week which had put the decline in durable goods orders at a larger 4.8%..

Total orders for transportation products dropped by 11.7% as the weakness in airplanes was offset somewhat by a 1.7% increase in demand for motor vehicles and parts.

Orders for non-durable goods, products such as food, clothing, chemicals and petroleum products, rose 1.2% in April, following a 1.8% rise in March and a 3.6% decline in January.

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