WASHINGTON -- New orders for U.S. manufactured durable goods surged for the second straight month in May, driven by aircraft orders, government data released Tuesday showed.
Durable goods orders rose 3.6% in May to $231.0 billion, the Commerce Department said.
“This month’s durable goods orders increase followed a similar 3.6% gain in April, " said Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation (MAPI). "There were, however, large losses in March that set up that rebound; year to date through May 2013, durable goods orders are up only 2.1% compared to the same period one year ago.”
“The reasons for the recent volatility are huge swings in aircraft and defense orders,” Meckstroth added. “Civilian aircraft orders were up 51% and defense capital goods orders rose 12% in May. It is necessary to remove the impacts of aerospace and defense to see that the underlying trend in capital goods. Nondefense capital goods orders excluding aircraft fortunately increased a healthy 1.1% in May and 1.2% in April.
Communications equipment orders also rose sharply, by 12.6%, while computers and electronic products gained 2.7%.
“Today’s durable goods report is encouraging,” Meckstroth said. “With all the problems facing global business growth such as the continuing recession in Europe and slower growth in many emerging regions, in addition to austerity and political gridlock here at home, U.S. businesses are ordering more capital equipment.
"Firms are betting on faster growth in the future. The durable goods report is good news and provides support to the forecast of a moderate rebound in the pace of economic growth in the second half of this year.”