U.S. Capital Goods Orders Surge to Highest Level Since 2004

New orders for U.S. durable goods beat expectations in May, rising 1.8%, the U.S. Census Bureau reported. New orders for manufactured durable goods increased $2.8 billion to $163.9 billion in May, the third increase in the last four months. Durable goods order were also up 1.8% April.

The increase beat most forecasts. Analysts polled by Reuters had forecast durable goods orders would decline 0.6% last month, while economists surveyed by Bloomberg projected orders would drop 0.9%.

Excluding transportation, new orders increased 1.1%. Excluding defense, new orders also increased 1.4%.

Non-defense new orders for capital goods in May increased $4.9 billion or 10% to $53.8 billion, largely on a 68% surge in commercial aircraft orders. Excluding aircraft, non-defense capital goods orders jumped 4.8%, the most since September 2004.

Shipments of manufactured durable goods in May, down ten consecutive months, decreased $3.6 billion or 2.1% to $169.9 billion, marking the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992.

Backlogs, down eight consecutive months, continued to decline in May, decreasing $2.0 billion or 0.3% to $747.5 billion. This followed a 1.1% April decrease.