WASHINGTON ---Following three months of gains and driven by a sharp monthly fall in defense goods, U.S. orders for durable goods fell in May, Commerce Department data showed Wednesday,
New orders for durable goods fell by $2.4 billion, or 1%, last month from April, when new orders had risen 0.8%.
Nearly all of the fall was in defense goods, and secondly, civilian aircraft.
Orders for defense goods were down $4.0 billion, or 31.4%, and civilian aircraft orders fell by $620 million. Both are key but often very volatile components of the total.
Offsetting those were a 2.1% rise in orders for automobiles and auto parts, and gains in orders for primary and fabricated metals.
Year-on-year, new orders continued to grow steadily, up 4.2% from May 2013.
"Of significance for the broad economy, new orders for nondefense capital goods excluding aircraft, a proxy for business equipment spending, rose by 1.4%, although this followed a 1.2% contraction in May,” said Cliff Waldman, senior economist for the Manufacturers Alliance for Productivity and Innovation (MAPI).
"But the year-over-year, year-to-date gain of only 2.7% in this critical barometer of business confidence and risk-taking suggests that the historically sluggish performance of capital spending in recent years will continue at least for the foreseeable future and will remain a drag on economic growth and job creation," Waldman added.
"U.S. manufacturing output growth will likely maintain its moderate course with some acceleration into 2015," Waldman said. "The U.S. economy appears to have at least stabilized from its winter doldrums, although weakness in the housing market is a source of short-term concern. But the still sluggish domestic economy combined with a mixed global picture, with critical regions such as China and the Eurozone continuing to struggle, means that the factory sector is not about to break out of its moderate, somewhat strained performance path anytime soon."
Copyright Agence France-Presse, 2014
