Orders of big-ticket manufactured items continued to defy expectations to rise again in May, fueled by a sharp jump in orders for transportation equipment, according to U.S. government data released Tuesday.
The figures underline the continued strength of some sectors of the American economy despite hikes in interest rates from the U.S. Federal Reserve as it moves to tackle high inflation.
Manufactured durable goods orders rose by 1.7% in May from a month earlier to $288.2 billion, the Commerce Department announced in a statement.
The increase was well above the median expectation of a fall in orders in a MarketWatch survey of economists.
"Durable goods orders have come in far stronger than implied by leading indicators and the survey data for three straight months now, making it hard to explain away the disconnect simply as noise," Pantheon Macronomics senior U.S. economist Kieran Clancy wrote in a note to clients.
The May increase was fueled by nondefense spending, with nondefense aircraft and parts orders growing by almost a third month-over-month.
New orders for nondefense capital goods and transportation equipment also saw substantial increases, while defense aircraft orders saw a steep decline month-over-month, following large gains in April.
"We thought these increases would be offset by a sharp decline in transport orders ex-autos and aircraft, following the 30% surge in April, but to no avail," Clancy said.
But the April jump "is entirely at odds with the flat trend in recent years, so a sharp drop in the months ahead due to mean-reversion still seems a reasonable bet," he added.
Copyright 2023, Agence France-Presse
