Wednesday, June 25, 2008

Durable Goods Orders

Orders for durable goods were unchanged in May, as orders for airplanes and defense goods offset weaker demand for machinery and metals. Economists were expecting a decline of 1.0% for the month. It is the second straight monthly decline, but, considering orders remain unchanged since January, some economists were quickly questioning if the U.S. economy would experience a recession.

Orders for core capital equipment, equipment businesses invest in to expand or update their productive capacity, fell 0.8% in May after a downwardly revised 3.1% increase in April. Core capital equipment orders, which exclude aircraft and non-defense goods, are the best monthly indicator of capital expenditures.

Orders for machinery dropped 5.3%, reversing April's 5.1% gain. Orders for primary metals fell 1.3%, while orders for fabricated metals increased by 0.1%.

Orders for transportation goods rose 2.6%, including a 10.3% rise in civilian aircraft orders. Orders for electrical equipment rose 1.5% after a double-digit gain in April.

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