Chill Spreads to Durable Goods

Orders for big-ticket items plunge more than predicted, clouding recovery forecasts
By Marie Morris,  Newser Staff
Posted Jun 27, 2007 10:16 AM CDT
Chill Spreads to Durable Goods
Shoppers view clothes washers and dryers at a Best Buy store in West Hollywood, Calif., Friday, March 23, 2007. The government said Wednesday, March 28, 2007, durable goods orders rebounded last month, but not as much as expected. The Commerce Department says orders for big-ticket manufactured goods...   (Associated Press)

(Newser) – Orders for durable goods nosedived in May, suggesting that sunny forecasts for business spending may be overly optimistic. The 2.8% drop, the first decline in 4 months, nearly tripled the predicted 1% dip, Bloomberg reports. Excluding the volatile transportation sectors, the figure was off 1%, Commerce Department stastics released today showed, against a projected .2% rise.

Demand for products designed to last longer than 3 years had risen 1.1% in April, the third straight month of gains and a sign of economic growth. Analysts didn't expect the manufacturing sector to maintain that pace, but the disparity raised concerns. Says one economist: "It's clear that businesses are being cautious in light of the softness in the economy." (Read more durable goods stories.)

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