US core capital goods orders, shipments falter
Unemployment falls to 16-year low
WASHINGTON: New orders for key US-made capital goods unexpectedly fell in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.
The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 0.2 percent, the largest decline since December.
These so-called core capital goods orders were revised to show an increase of 0.2 percent for April. They were previously reported to have risen 0.1 percent.
Shipments of core capital goods fell 0.2 percent last month after rising 0.1 percent in April. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product (GDP) measurement.
Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent in May.
US Treasury yields fell after the publication of the data and US stock index futures slightly pared gains. The US dollar was trading lower against a basket of currencies.
The report added to growing worries that an acceleration in economic growth in the second quarter may not be as fast as expected. Recent data on retail sales, manufacturing production and inflation have signaled softness and housing data has been mixed.
The weakness comes despite a continuing strong job market. The unemployment rate fell to a 16-year low of 4.3 percent in May.
Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or longer, fell 1.1 percent in May, the biggest decline since November. They dropped 0.9 percent in April.
Last month, orders for machinery rose 0.6 percent while shipments decreased 0.3 percent. Civilian aircraft orders declined 11.7 percent and bookings for defense aircraft and parts plummeted 30.8 percent. Orders for motor vehicles and parts increased 1.2 percent.