U.S. Durable Goods Orders Rise 1.1%
06/27/2012| 08:55am US/Eastern
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WASHINGTON--Orders for long-lasting goods posted the first gain in three months in May, suggesting that the manufacturing sector stabilized a bit after an early spring slowdown.
Manufacturers' orders for durable goods, items such as airplanes and televisions designed to last at least three years, grew by 1.1% to a seasonally adjusted $217.15 billion, the Commerce Department said Wednesday.
Economists surveyed by Dow Jones had forecast May orders would register a 0.4% increase.
In April, durable orders were revised down to $214.83 billion, a 0.2% decline from the prior month.
May's gain was led by stronger demand for machinery, defense equipment and cars.
A key barometer of business investment also grew in May. Orders for nondefense capital goods excluding aircraft increased by 1.6% after falling the prior two months, suggesting renewed confidence about the economic recovery.
Manufacturing has played a key role in the economic recovery, including being a significant source of new jobs. However, job creation in the sector has slowed along with the broader economy in recent months. In May, only 12,000 manufacturing jobs were added to payrolls after just 9,000 the month before, according a Labor Department report.
Overall, the U.S. payrolls grew by just 69,000 last month--the weakest job creation figure of the year.
Wednesday's report showed defense capital spending increased 7.8% in May after a 24.1% drop the prior month. Orders for all capital goods, including defense grew 1.9% last month.
Excluding orders related to defense, durables were 0.7% higher in May after rising 0.9% in April.
Transportation-related orders increased 2.7% in May as orders for nondefense aircraft--a volatile sector--rose 4.9% last month. Orders for motor vehicles and parts rose 0.5% in May.
In April, total transportation orders grew 0.8%.
Outside transportation, orders for other durables increased 0.4% in May, after a 0.6% fall in April.
Unfilled orders, a sign of future demand, was unchanged last month. Shipments of durable goods rose by 0.7% in May, while inventories increased 0.5%.
The Commerce Department's durable goods orders report can be found at http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf.
-Write to Eric Morath at eric.morath@dowjones.com and Sarah Portlock at sarah portlock@dowjones.com.
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