Weak Manufacturing May Signal Slowdown

May 28, 2019

While the U.S. economy was able to avoid an anticipated slowdown in the first quarter, new signs suggest that a slowdown may arrive in the second quarter. Orders of durable goods, those meant to last more than three years, such as home appliances and cars, fell 2.1 percent in April. March’s previously reported orders were also revised downward.

Some of the drop can be attributed to the turmoil in the airline industry that followed two fatal crashes of Boeing jetliners. However, weakness was widespread, as orders for non-defense capital goods excluding aircraft fell 0.9 percent.

Though durable goods make up a relatively small portion of total GDP, manufacturing is a strong indicator of demand, and considered to be a bellwether for the overall direction of the economy.

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