RTTNews - Orders for goods meant to last at least three years unexpectedly showed a substantial increase in the month of May, according to a report released by the Commerce Department on Wednesday, with the order growth marking the third increase in the last four months.
The report said durable goods orders rose 1.8 percent in May, matching the revised increase seen in April. The continued increase came as a surprise to economists, who expected orders to fall 0.9 percent compared to the 1.9 percent increase originally reported for the previous month.
Another notable increase in orders for transportation equipment contributed to the bigger than expected increase in durable goods orders. Orders for transportation equipment increased by 3.6 percent in May following a 6.2 percent increase in May.
Orders for non-defense aircraft and parts showed a particularly strong increase, rising by 68.1 percent after falling 1.4 percent in the previous month. The growth more than offset an 8.1 percent drop in orders for motor vehicles and parts.
Excluding the continued increase in orders for transportation equipment, durable goods orders still rose 1.1 percent in May compared to a 0.4 percent increase in April. Economists had expected ex-transportation orders to fall 0.5 percent.
A 7.7 percent increase in orders for machinery contributed to the unexpected increase along with a 2.2 percent increase in orders for computers and electronic products.
At the same time, the Commerce Department said that shipments of durable goods fell 2.1 percent in May following a 0.5 percent decrease in April.
With the continued decrease, shipments of durable goods fell for the tenth consecutive month, marking the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992.
Inventories of durable goods fell for the fifth consecutive month, falling by 0.8 percent in May following a 1.1 percent decrease in April.
Meanwhile, the report showed that orders for non-defense capital goods, excluding aircraft, which is seen as an indicator of business spending, jumped 4.8 percent in May following a revised 2.9 percent drop in April.
Next Thursday, the Commerce Department is due to release its report on factory orders in the month of May, which includes orders for both durable and non-durable goods.
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