New orders for U.S. manufactured durable goods increased by more than expected in the month of May, according to a report released by the Commerce Department on Monday.
The report showed durable goods orders climbed by 0.7 percent in May after rising by 0.4 percent in April. Economists had expected orders to inch up by 0.1 percent.
The bigger than expected increase in durable goods orders came as orders for transportation equipment advanced by 0.8 percent in May after climbing by 0.7 percent.
An 8.1 percent spike in orders for defense aircraft and parts helped offset a 1.1 percent slump in orders for non-defense aircraft and parts.
Excluding an advance in orders for transportation equipment, durable goods orders still rose by 0.7 percent in May after edging up by 0.2 percent in April. Ex-transportation orders were expected to rise by 0.3 percent.
Orders for primary metals soared by 3.1 percent, while orders for machinery and communications equipment also showed notable increases.
The report also showed orders for non-defense capital goods excluding aircraft, a key indicator of business spending, increased by 0.5 percent in May after rising by 0.3 percent in April.
Shipments in the same category, which is the source data for equipment investment in GDP, advanced by 0.8 percent for the second straight month.
“Looking ahead, a shifting economic backdrop will normalize the pace of durable goods activity relative to what we’ve become accustomed to since the start of Covid,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “Challenges stemming from more modest consumer goods demand, soaring inflation, higher interest rates, and spiking recession fears will be partially offset by long-term positive trends such as automation and boosting supply chain resiliency.”
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