The drop in basic equipment orders highlights low commercial expenses

Washington >> New orders for capital goods manufactured by the United States immersed in April in the middle of the growing uncertainty on the economy due to prices, suggesting commercial expenses for weakened equipment at the start of the second quarter.

The report of the Commerce Department today also showed that the shipments of these goods down last month. Economists said President Donald Trump’s switching to import rights made it difficult for companies to plan in advance. This was obvious in the deterioration of feeling among companies.

“I have predicted for months that commercial investment will be the main engine of a softer economic performance this year, because the leaders refer to their fixed assets until they have more clarity on politics,” said Stephen Stanley, US chief economist at Santander Us Markets. “These data offer the first confirming proof of this hypothesis.”

Orders of non -defensive capital goods excluding planes, a proxy near commercial spending plans, released 1.3% last month after an upward gain of 0.3% in March, said the Census Department Census Office. The economists interviewed by Reuters had provided that these so-called basic equipment orders plunged 0.1% after a previously reported drop by 0.2% in March.

The main shipping of equipment dropped by 0.1% after increasing 0.5% in March. Orders of non-defense equipment dropped by 19.1%. The shipments of these goods rebounded 3.5% after falling 1.1% in March.

The first round of companies wishing to avoid higher prices of Trump’s radical prices on imports has contributed to commercial spending on equipment, mainly information processing equipment, increasing at its fastest rate in 4-1 / 2 years in the first quarter.

This helped limit the drag on the gross domestic product from a flood of imports. Trump delayed higher import duties on most countries until July. The White House announced this month an agreement with Beijing to reduce prices on Chinese products to 30%, compared to 145% for 90 days.

Price

But Trump last week reduced his trade war, offering a 50% rate on European Union products from June 1 and threatened Apple with an obligation of 25% on all iphones produced outside the United States.

Trump, the weekend, fell off his threat against the EU, a restaurant a deadline of July 9. He considers prices as a tool to, among other things, revive a long -standing American industrial base, a feat which, according to economists, would be difficult to achieve.

While orders for computers and electronic products rebounded 1.0% last month, reservations for communication equipment decreased by 2.6%. Orders of electrical equipment, household appliances and components dropped by 0.2%. But machine controls increased by 0.8%, as well as those of metal products manufactured.

Orders of sustainable products, from the articles ranging from Tasters to planes intended to last three years or more, dropped by 6.3% last month after a slightly revised increase of 7.6% in March.

Sustainable goods orders would have already jumped 7.5% in March. Last month, they were increased by a drop in commercial aircraft orders as well as the discoloration of the boost of the front racing linked to the prices.

Boeing reported on his website that he had received only eight planes orders in April, against 192 in March. Control vehicle controls and parts decreased by 2.9%.

Global transport orders dropped 17.1% after having become a rushed 23.5% in March.

“Many inputs that enter into the manufacture of sustainable products in America are made in countries abroad, which should be imported to what it could be a much higher and mobilized price when taking prices into account,” said Christopher Rupkey, chief economist at FWDBBB. “Trying to revitalize American manufacturing will be difficult if factories cannot get the parts they need in a timely and at a reasonable cost.”