Economy

Durable Goods Orders Slip in May

June 27, 2017

Durable goods orders, products designed to last three or more years, slipped for a second month, falling 1.1 percent in May, according to the U.S. Commerce Department. Core capital goods orders, a category that tracks business investment, declined for the first time this year, inching down 0.2 percent.

Airline orders drove the decline with commercial aircraft falling 12 percent and defense aircraft plummeting 31 percent. Automotive orders improved for the second month, gaining 1.3 percent. Orders excluding transportation rose 0.1 percent in May.

Bloomberg writes, “This report isn’t all bad, but the capital goods readings are a tangible disappointment for the second-quarter outlook, pointing to lack of confidence in business prospects. The data contrast sharply with the ongoing strength in regional surveys. But in actual government data, the factory sector isn’t having a breakout year as some had hoped.”

The text of the Advance Report on Manufacturers’ Shipments, Inventories and Orders May 2017 is reprinted below.

June 26, 2017 — The U.S. Census Bureau announces the May advance report on manufacturers’ shipments, inventories and orders:

New Orders: New orders for manufactured durable goods in May decreased $2.5 billion or 1.1 percent to $228.2 billion. This decrease, down two consecutive months, followed a 0.9 percent April decrease. Excluding transportation, new orders increased 0.1 percent. Excluding defense, new orders decreased 0.6 percent. Transportation equipment, also down two consecutive months, drove the decrease, $2.7 billion or 3.4 percent to $75.4 billion.

Shipments: Shipments of manufactured durable goods in May, up following two consecutive monthly decreases, increased $1.8 billion or 0.8 percent to $234.9 billion. This followed a 0.3 percent April decrease. Transportation equipment, up following four consecutive monthly decreases, led the increase, $1.5 billion or 1.9 percent to $78.8 billion.

Unfilled Orders: Unfilled orders for manufactured durable goods in May, down following two consecutive monthly increases, decreased $2.3 billion or 0.2 percent to $1,120.1 billion. This followed a 0.2 percent April increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.4 billion or 0.4 percent to $762.8 billion.

Inventories: Inventories of manufactured durable goods in May, up 10 of the last 11 months, increased $0.7 billion or 0.2 percent to $395.4 billion. This followed a 0.2 percent April increase. Computers and electronic products, up nine of the last 10 months, led the increase, $0.1 billion or 0.3 percent to $44.3 billion.

Capital Goods: Nondefense new orders for capital goods in May decreased $1.7 billion or 2.4 percent to $68.3 billion. Shipments increased $0.3 billion or 0.4 percent to $70.1 billion. Unfilled orders decreased $1.8 billion or 0.3 percent to $695.0 billion. Inventories decreased less than $0.1 billion or virtually unchanged to $176.8 billion. Defense new orders for capital goods in May decreased $0.8 billion or 8.2 percent to $9.2 billion. Shipments increased less than $0.1 billion or 0.3 percent to $10.2 billion. Unfilled orders decreased $1.1 billion or 0.8 percent to $140.4 billion. Inventories increased less than $0.1 billion or 0.1 percent to $22.5 billion.

Revised April Data: Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $468.7 billion (revised from $469.0 billion); shipments, $471.1 billion (revised from $470.8 billion); unfilled orders, $1,122.4 billion (revised from $1,123.0 billion) and total inventories, $650.0 billion (revised from $649.7 billion).