Durable goods orders posted a modest decline in May, but with the volatile aircraft sector stripped out, bookings rose 0.7 percent, easing concern that the economy is cooling too quickly.
Overall, orders for durable goods, items made to last at least three years, slipped 0.3 percent last month after falling 4.7 percent in April. Economists had expected a 0.4 percent gain in May. It was the first time in two years that total orders have registered back-to-back declines.
Still, “things look reasonably solid,” said Jay Feldman, a senior economist at Credit Suisse Holdings in New York. “We are going to get a reasonably decent contribution from business spending this quarter. There is no real sign of a major slowdown here.”
Orders for transportation equipment fell 2.6 percent in May. Bookings for motor vehicles and parts rose 2.5 percent, but aircraft orders tumbled 18 percent after a 30 percent plunge in April.
Orders for commercial aircraft are volatile and often lead to swings in overall bookings. Chicago-based Boeing Co. received orders for 33 aircraft in May, down from 149 a month earlier.
“I would not read too much into that” drop, said Brian Jones, an economist at Citigroup Global Markets Inc. in New York. “These things tend to be lumpy.”
Offsetting somewhat the weakness in commercial aircraft was a 26.4 percent surge in orders for military aircraft, an increase that followed a 34 percent drop in April.
Machinery orders increased 2.3 percent last month. Orders for computers rose 1.9 percent.
Orders for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1 percent. Shipments, the numbers used in calculating gross domestic product, edged up 0.1 percent.
Inventories of durable goods rose 0.4 percent, as metals stockpiles rose to a record level. Unfilled orders, a gauge of future production, increased 0.6 percent.
