Durable goods orders fall more than expected

Headline durable goods orders fell 1.8% in May, more than was expected by economists.

Expectations were for headline durable goods orders to fall 1% in May against the prior month, but rise 0.5% when excluding items like transportation and defence orders.

Durable goods orders excluding aircraft and defence orders, or “core” orders, rose 0.4% in May, a bit less than expected.

Excluding defence, orders rose 2.1% in May.

For the first time in 23 months, inventories of durable goods fell 0.2% in May.

Last month, durable goods orders fell 1%.

In a note to clients following the report, Bricklin Dwyer at BNP Paribas noted 2 takeaways from the report:

  • Orders are running at a disappointing pace, and;
  • Shipments disappointed in May after they were revised lower in April following the factory orders report.

Dwyer added that this report takes BNP’s Q2 GDP tracking estimate down to 3.4% from 3.5% and said the report will likely be viewed negatively by policymakers.

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