Orders for appliances, computers, cars, machinery, metals, and other durable goods made in American factories increased sharply in May, data from the government showed Thursday.
Orders for core capital goods—durable goods excluding aircraft and defense—rose 1.6 percent in May, the Department of Commerce said. Compared with the first five months of last year, orders are up 8.3 percent.
The monthly numbers are adjusted for seasonality but not prices. Year-to-date figures are not seasonally adjusted. The producer price index for private capital equipment rose 0.3 percent from April to May and is up 3.9 percent from a year earlier, suggesting that the orders figures indicate a strong increase in inflation-adjusted demand for capital goods.
New orders for machinery, which rose 1.9 percent in May and are up 10.3 percent year to date, were the biggest driver of the May increase, accounting for nearly three-fifths of the gain in core capital goods.
Orders for computers and related equipment rose 1.6 percent. Year-to-date, they are up 21.2 percent. This largely reflects the massive investment in artificial intelligence-related data centers. Communications equipment orders, another category boosted by AI investment, rose 0.8 percent and are up 32.4 percent from the five-month period a year ago.
Orders for primary metals, such as steel and aluminum, rose three percent in May. Year to date, these are up 11.4 percent. Fabricated metal product orders rose 1.5 percent, bringing the year-to-date gain to 7.6 percent.
Motor vehicle orders jumped 1.1 percent. So far this year, these are up 9.7 percent.
Orders for non-defense aircraft, an extremely volatile category, fell 51.8 percent in May after jumping 167.4 percent in April. Compared with the first five months of 2025, civilian aircraft orders are down 22.4 percent.
Defense capital goods orders declined 3.4 percent in May. Year to date, however, they are up 44.3 percent.
The decline in defense capital goods and civilian aircraft orders pushed down the overall durable goods orders estimate for May, creating a month-to-month decline of 4.5 percent. Year-to-date, overall durable goods orders are up 6.2 percent year to date.
Read the full article here