WASHINGTON – Manufacturers’ orders for durable goods orders fell a seasonally adjusted 2.8 percent in May, after rising a revised 1.1 percent the month before, the U.S. Census Bureau announced today.
The decline was sharper than expected. Economists surveyed by Bloomberg News had predicted orders would retreat 1 percent in May, erasing the 0.8-percent rise originally reported for April.
The May decline, the first in four months, was led by drops in orders for aircraft, metals and machinery.
Orders excluding transportation equipment fell 1 percent, five times the 0.2 percent expected by analysts. Excluding defense, orders fell 3.2 percent in May after rising 1.2 percent the month before.
Among capital goods, non-defense orders excluding aircraft fell 3 percent last month after rising 2.3 percent in April. Aircraft orders fell 23 percent, extending April’s 11-percent decline.
“It’s clear that businesses are still somewhat risk averse and that they are being cautious in light of the softness in the economy,” Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Mass., told Bloomberg News. Kevin Logan, senior market economist at Dresdner Kleinwort in New York, added: “The optimism about business spending maybe was a bit overdone. The economic rebound will be pretty modest.”
Additional information, including the Advance Report on Manufacturers’ Shipments, Inventories and Orders (M3), is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov/m3.
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