US durable goods orders fell -4.5% mom in May, a smaller decline than the expected -4.7% drop, as a sharp pullback in transportation equipment orders offset continued strength elsewhere in the manufacturing sector. The decline followed April’s 8.5% surge and was driven by a -14.0% fall in transportation equipment orders to USD 113.5B. Excluding transportation, however, durable goods orders rose a solid 1.3%, comfortably beating expectations for a 0.5% increase.
The underlying details pointed to resilient business demand despite the volatile headline figure. Orders excluding defense declined -4.6%, reflecting the weakness in transportation, while the broad gain in orders outside the transportation sector suggests manufacturers continue to see healthy underlying demand. The report indicates that May’s decline was more of a normalization following two months of exceptionally strong transportation orders rather than a broad-based deterioration in factory activity.
Manufacturing activity also remained supported by solid production. Shipments of durable goods increased 1.0% mom to USD 327.9B after a 0.7% gain in April, marking the eighth increase in the past nine months. Transportation equipment again led the advance, with shipments rising 1.4%. Overall, the report points to continued resilience in the manufacturing sector, with core demand and shipments remaining firm even as the highly volatile transportation category weighed on the headline reading.
| Indicator | May | Expectation |
|---|---|---|
| Durable Goods Orders | -4.5% m/m | -4.7% m/m |
| Durable Goods Orders ex Transportation | +1.3% m/m | +0.5% m/m |
| Durable Goods Orders ex Defense | -4.6% m/m | — |
| Transportation Equipment Orders | -14.0% m/m | — |
| Durable Goods Shipments | +1.0% m/m | — |
| Transportation Equipment Shipments | +1.4% m/m | — |
