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Durable goods orders rise modestly, but less than expected

Tools are displayed at the Fairmount Hardware in Philadelphia. Orders for durable goods rose a tepid 0.2 percent in April.
Tools are displayed at the Fairmount Hardware in Philadelphia. Orders for durable goods rose a tepid 0.2 percent in April.Matt Rourke / AP

New orders for long-lasting products rose in April, but by less than expected, raising worries that the manufacturing sector, which has been helping to power the recovery, may be slowing.

The Commerce Department reported that new orders for durable goods, which comprise products ranging from tools to kitchen appliances to commercial aircraft, increased 0.2 percent last month, versus a revised 3.7 percent decrease posted in March. Economists had been expecting an increase of about 0.5 percent in April.

Orders were dragged down by a 2.8 percent decline in machinery and 34 percent fall in military aircraft. New orders of computers and electronic products fell 0.6 percent.

Excluding transportation, orders fell 0.6 percent. Economists had forecast this category to rise 0.9 percent.

Manufacturing has been one of the main sources of economic growth, but it could be slowing as euro zone economies slide into recession and China's economy cools.

Civilian transportation orders were a bright spot in the report. New orders for motor vehicles rose 5.6 percent, while non-defense aircraft rose 7.2 percent despite Boeing reporting on its website that it received only four orders for aircraft last month.

Adding to the report's weak tenor, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 1.9 percent in April after a revised 2.2 percent drop the prior month.

Economists had expected this category to rise 0.7 percent after a previously reported 3.6 percent increase.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, dropped 1.4 percent after increasing 1.9 percent in March.

Reuters contributed to this report.