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Weak aircraft, auto sales push key US data to 9-month low
WASHINGTON, May 25, 2019 (BSS/AFP) – Sales of US-manufactured goods were
unexpectedly weak in April, hitting the lowest level in nine months, as
American companies sold fewer cars, planes and factory equipment, according
to data released Friday.
And sales in March were not as robust as originally reported, due to a
sharp downward revision to aircraft sales.
That takes the some of the shine off the unexpected jump in economic
growth in the first three months of the year, which President Donald Trump
has hailed as proof his economic policies are working.
But Trump’s trade war with China and other trading partners is
overshadowing the outlook.
The disappointing Commerce Department data on durable goods sales for
April marked a subdued start to the second quarter of 2019, which is expected
to show a slowdown in economic activity.
Although a sales dip in April was expected due to the crisis at aviation
giant Boeing — which was forced suspended deliveries of a top-selling jet
after deadly crashes — orders for jets fell even faster than expected.
Auto sales also dropped sharply and a category seen as a proxy for
business investment fell.
New orders for big-ticket manufactured items fell 2.1 percent for April to
$248.4 billion, the lowest since July of last year, putting sales down in two
of the last three months, the Commerce Department reported.
Economists had expected a two percent drop. Sales are still two percent
higher in the first four months of 2019 compared to the same period last
year.
Auto sales sank 3.4 percent while civilian aircraft orders — a volatile
category in the best of times — plunged 25.1 percent, following a major
reduction to the March sales figures.
Excluding transportation, sales were flat, after two months of declines,
undershooting economists’ expectations for a token 0.2 percent rebound.
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Meanwhile, orders for primary metals, telecommunications equipment and
non-defense capital goods — a measure that can track oil prices and
companies’ plans for expansion — all fell.
The White House made boosting capital expenditures by businesses a central
argument for the 2017 tax cuts, claiming it would boost productivity and
employment by freeing up resources for manufacturers to build factories.
Sales of defense items were a bright spot, rising 4.8 percent.
Jim O’Sullivan of High Frequency Economics said the trend in the data was
not as weak as the April figures alone would suggest “but there has been
significant slowing.”
April was flat compared to the same month last year, whereas a year ago,
the 12-month change was as high as nine percent, he said.
“The manufacturing sector is disproportionately exposed to weakening
foreign demand,” he said in a client note.
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