US durable goods orders miss forecasts in May
Total durable goods orders in the States shrank by more-than-expected last month, amid sharp falls in those for civilian and defence aircraft and weakness in core orders, with analysts linking the latter to the retreat in oil prices.
Orders for goods made to last more than years dropped by 1.1% month-on-month in May to reach to $228.18bn, according to the Department of Commerce.
Economists had anticipated a fall of 0.6%.
Excluding transportation, orders edged higher by 0.1% on the month to $152.77bn (consensus: 0.4%) and excluding defence by 0.6%.
Transportation orders were down by 3.4% in comparison to April, reaching $75.41bn. However, orders for motor vehicles and parts grew by 1.2% to $54.42bn.
Orders for civilian aircraft and parts on the other hand decreased by 11.7% to $9.81bn and those for defence aircraft by 31% to $3.7bn.
So-called 'core' orders for capital goods, which exclude those for aircraft and defence, declined by 0.2% to $62.9bn, undoing the previous month's gains.
According to Ian Shepherdson, chief economist at Pantheon Macroeconomics, in recent years core capex orders had lagged oil prices by a few months.
If that relationship continued to hold then orders would remain steady throughout the summer and then fall modestly in the fall.
However, Shepherdson did not expect to see a meltdown in capex.
"A repeat of the 2015/16 meltdown is not in the cards. The strong capex intentions component in the NFIB survey suggests core activity should outperform the signal of the oil price data, but we'll believe that when we see it."