Washington, DC, June 23, 2006--Led by a big drop in orders for aircraft, U.S.-made durable goods fell 0.3% in May, the second decline in a row, according to the Commerce Department.
Economists expected orders to fall about 0.2%.
Orders for new aircraft were off 17.9% in May after a 30% decline in April, bringing that volatile category closer to normal levels after several months of extraordinary orders to Boeing.
Excluding transportation goods, new orders rose 0.7%.
New orders in April were revised lower to a 4.7% decline from 4.4% earlier.
Despite the two declines, orders for durable goods are up 9.5% year-to-date. However, orders are down 3.5% since a peak in December.
Durable goods are large items meant to last three years or longer, such as computers, airplanes, washing machines, and steel.
Led by shipments of transportation goods, shipments of durable goods increased 2.6%, the largest gain since December. Shipments are up 7.3% year-to-date and are at a record level.
Manufacturers' inventories increased 0.4%. Unfilled orders rose 0.6%.
Orders for nondefense, nonaircraft capital goods increased 1% in May and are up 10% year-to-date, an indication that business capital investment is growing at a healthy clip.
The report is not likely to have any impact on deliberations at the Federal Reserve next week about interest-rate policy. Concerns at the Fed revolve around inflation, housing and consumer spending, not the factory sector.
In May, orders for machinery increased 2.3% while shipments rose 0.3%. Orders for computers and electronics (excluding semiconductors) fell 1.1%. Shipments (which do include semiconductors) rose 2.4%. Orders for transportation goods fell 2.6%, while shipments rose 5.1%. Orders for aircraft fell 17.9% and orders for motor vehicles rose 2.5%.
Orders for electrical goods fell 0.2% while shipments rose 1.8%. Orders for primary metals rose 3.5% while shipments increased 5.9%. Orders for finished metals fell 1.3% while shipments rose 0.9%
