The Obama administration desperately needs another distraction to take people's minds off of a failing economy. Despite confident predictions that the economy will pick up the pace this year and start creating jobs, we can be reasonably certain that it won't happen in the manufacturing sector in the near future.
In advance of the Commerce Department release of GDP numbers for the first quarter tomorrow, things are not looking up for the economy.
Orders declined in March for commercial aircraft, metals, machinery and electrical equipment, today's figures showed. Bookings advanced for automobiles, computers and communications gear.
Peoria, Illinois-based Caterpillar, the largest maker of mining equipment, cut its 2013 forecast and "significantly" lowered its outlook for demand from commodities producers. Sales in 2013 will be $57 billion to $61 billion, compared with an earlier forecast of $60 billion to $68 billion.
Capital expenditures by business remain weak, Michael DeWalt, Caterpillar's director of investor relations, said on an April 22 earnings call. Dealers whittled down inventories, and orders for mining equipment including trucks and bulldozers fell in the first quarter.
Today's report showed shipments of capital goods, a measure that's used in calculating gross domestic product, climbed 0.3 percent and were up at a 4.1 percent rate in the past three months. They were up at a 5.1 percent pace in the three months to December.
Economists at Morgan Stanley and JPMorgan Chase & Co. in New York lowered their first-quarter GDP tracking estimates after today's report. JPMorgan reduced its projection to 2.9 percent from 3.1 percent, while Morgan Stanley lowered its forecast to 2.7 percent from 2.9 percent.
The Commerce Department will issue its initial estimate of first-quarter growth on April 26.
Today's figures showed bookings for commercial aircraft, which are often volatile, declined 48.2 percent after surging 86.4 percent in February. Boeing Co. (BA), the Chicago-based aerospace company, said it received orders for 39 aircraft in March, down from 179 placed in February.
Of course, anything would be an improvement over the 2012 fourth quarter rise of 0.4%. But experiencing another quarter with growth under 3% could mean another June swoon for the economy and an "unexpected" fall off in growth.
It's getting harder to believe those economists who keep telling us things will be better in the second half of the year when numbers like this come out.