Washington, Jun. 27, (dpa-AFX/GNA) – Reflecting a continued spike in orders for transportation equipment, the US Commerce Department released a report on Tuesday showing an unexpected surge in new orders for US manufactured durable goods in the month of May.
The Commerce Department said durable goods orders shot up by 1.7% in May after jumping by an upwardly revised 1.2% in April.
Economists had expected durable goods orders to slump by 1.0% compared to the 1.1% advance that had been reported for the previous month.
“The latest durable goods orders and shipments data fend off fears that a recession is just around the corner,” said Oren Klachkin, Lead US Economist at Oxford Economics. “We continue to think that the economy will eventually fall into a recession, but it looks increasingly unlikely to begin in Q3.”
He added: “The economic backdrop is set to become more discouraging for manufacturers as tighter lending standards and elevated interest rates weaken demand for goods.”
The unexpected increase in durable goods orders came as orders for transportation equipment spiked by 3.9% in May after soaring by 4.8% in April.
Orders for non-defence aircraft and parts led the way higher, skyrocketing by 32.5% in May after tumbling by 2.0% in April.
Excluding the surge in orders for transportation equipment, durable goods orders climbed by 0.6% in May after falling by a revised 0.6% in April.
Ex-transportation orders were expected to edge down by 0.1% compared to the 0.2% dip that had been reported for the previous month.
Orders for electrical equipment, appliances and components surged by 1.7%, while orders for machinery jumped by 1.0%.
The report also said orders for non-defence capital goods excluding aircraft, a key indicator of business spending, increased by 0.7% in May after climbing by 0.6 percent in April.
Shipments in the same category, which is the source data for equipment investment in GDP, inched up by 0.2% in May after rising by 0.4% in the previous month.
GNA