Durable Goods Orders Declined in May
June 26 2019 - 9:00AM
Dow Jones News
By Sarah Chaney and Kate Davidson
WASHINGTON--Demand for long-lasting goods produced by U.S.
factories decreased in May for the third time in four months,
underscoring a broader slowdown in the manufacturing sector.
Overall orders for durable goods, manufactured products intended
to last at least three years, fell 1.3% in May from the prior
month, the Commerce Department said Wednesday. The decline was much
steeper than economists surveyed by The Wall Street Journal had
expected.
Much of the drop owed to the volatile civilian-aircraft
component, which dropped 28.2% from April following a decision by
global aviation authorities in March to ground Boeing Co.'s 737 MAX
airliner after a pair of fatal crashes.
When excluding the transportation category, which tends to be
volatile, orders grew at a 0.3% pace.
Excluding defense, another choppy category, durable orders
decreased 0.6%, the third drop in four months.
An underlying business-investment gauge, new orders for
nondefense capital goods excluding aircraft, increased 0.4% from
April. Part of the rise in capital spending could reflect payback
from April, when companies pulled back sharply on investment.
More broadly, the durable-orders data is consistent with other
measures of U.S. manufacturing, which have shown cooling after a
robust 2018. The Institute for Supply Management said its measure
of factory-sector activity slowed in May. Other Federal Reserve
data show manufacturing output has declined since the end of last
year.
Global economic growth has slowed, as trade tensions between the
U.S. and its global partners heightened and central banks around
the world tightened financial conditions. These factors could be
dampening demand for U.S.-made products.
Write to Sarah Chaney at sarah.chaney@wsj.com and Kate Davidson
at kate.davidson@wsj.com
(END) Dow Jones Newswires
June 26, 2019 08:45 ET (12:45 GMT)
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