New orders for durable goods rose sharply in May, propelled by a surge in aircraft contracts and a broader rebound in business investment.
Orders for long-lasting manufactured goods increased 16.4 percent from the prior month to a seasonally adjusted $343.6 billion, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had expected a 7 percent increase.
Much of the gain came from a 230.8 percent jump in orders for nondefense aircraft, a volatile category that often drives large monthly swings. Still, orders excluding the transportation sector rose 0.5 percent, exceeding expectations for a 0.1 percent decline, a sign of underlying strength across manufacturing industries.
A key gauge of business investment—nondefense capital goods excluding aircraft—rose 1.7 percent, the strongest showing since December and a positive signal for future equipment spending. Shipments in the same category, which feed directly into GDP calculations, were up 0.5 percent.
Computers and electronic products posted a 1.5 percent rise in new orders, while electrical equipment and appliances climbed 0.8 percent. Machinery orders were up 0.3 percent, and fabricated metal products rose 0.7 percent.
Overall shipments of durable goods rose 0.2 percent in May.
Transportation equipment orders increased 48.3 percent, led by aircraft but also supported by a 0.6 percent rise in orders for motor vehicles and parts. Orders for defense capital goods advanced 38.7 percent.
The report suggests U.S. manufacturers are beginning to recover momentum, with strong aircraft bookings and steady growth in core sectors such as electronics and capital equipment. The gains come amid signs of easing inflation, improving supply chains, and a steady outlook for interest rates
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