US durable goods or­ders drop 1.8% in May fol­low­ing fall in de­mand for air­craft


Or­ders to U.S. fac­to­ries for lon­glast­ing man­u­fac­tured goods fell in May, pulled down by a sharp drop in de­mand for air­craft. But a cat­e­gory that re­flects busi­ness in­vest­ment rose last month, a hope­ful sign for man­u­fac­tur­ing.

The Com­merce Depart­ment said Tues­day that to­tal or­ders for durable goods dropped 1.8 per­cent in May af­ter fall­ing 1.5 per­cent in April. Last month’s drop was caused in part by a 35.3 per­cent plunge in or­ders for air­craft, which is of­ten a volatile cat­e­gory. Ex­clud­ing trans­porta­tion, or­ders rose 0.5 per­cent.

A key cat­e­gory that tracks busi­ness in­vest­ment plans — or­ders for non- mil­i­tary cap­i­tal goods ex­clud­ing air­craft — rose 0.4 per­cent in May, re­vers­ing a 0.3 per­cent drop in April.

Amer­i­can f ac­to­ries have strug­gled this year in part be­cause a strong dol­lar has made U. S. goods more ex­pen­sive over­seas. Cheaper oil prices also mean energy firms are buy­ing less equip­ment. So far this year, durable goods or­ders are down 2.2 per­cent from Jan­uary- May 2014. The cat­e­gory that tracks busi­ness in­vest­ment is down 2.6 per­cent through May this year.

Last week, the Fed­eral Re­serve said man­u­fac­tur­ing out­put dropped 0.2 per­cent in May.

The Fed­eral Re­serve Bank of New York also re­ported that fac­tory ac­tiv­ity in New York state con­tracted in June. But fac­to­ries around Philadelphia ex­panded this month at the fastest pace since De­cem­ber, the Philadelphia Fed re­ported last week.

De­spite their trou­bles, fac­to­ries keep hir­ing, though at mod­est lev­els. The La­bor Depart­ment re­ported that man­u­fac­tur­ers have added jobs 22 straight months through May, long­est streak since the late 1970s.

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