Drop in US aircraft sales drags down April durable goods

A sharp drop in sales of US civilian aircraft held down durable goods orders in April, offsetting strong gains in other areas, according to government data released Thursday.

Despite the overall decline, the numbers showed some signs of continuing health in the crucial manufacturing sector at the start of the second quarter. The April slump could still weigh on GDP growth, however.

Total orders for big-ticket manufactured items fell 1.7 percent for the month to $248.5 billion, slightly lower than economists were expecting. But for the year-to-date, orders were still up 9.6 percent over the same period in 2017.

Because of the disappointing result, Barclays lowered its forecast for second quarter GDP growth to 2.8 percent below President Donald Trump's three-percent target.

Volatile civilian aircraft sales fell 29 percent, giving back half of March's 60 percent increase and likely reflecting a decline in bookings by aerospace giant Boeing.

Auto sales rose a solid 1.8 percent ahead of the summer driving season, and defense aircraft rose 7.5 percent, reversing March's drop.

But outside the volatile transportation sector, which sees big swings from month to month, orders rose a healthy 0.9 percent from the prior month, the third straight monthly gain and faster than the 0.4 percent increase seen in March.

While orders for machinery fell, manufacturers in most other sectors saw significant increases, including computers and related products, and electrical and communications equipment.