New orders for long-lasting US-made manufactured goods tumbled a larger-than-expected 2.8 per cent in May in a sign the struggling US manufacturing sector may be weaker in the second quarter than expected.
The drop in durable goods orders was the first decline since January and followed a 1.1 per cent rise in April, the Commerce Department said today.
US debt prices extended gains, the dollar edged down and US stock index futures extended losses on the report. "It is surprisingly weak. This is probably a reflection from the business side," said Robert Lutts, president and chief investment officer at Cabot Money Management in Salem, Massachusetts.
Transportation orders fell 6.8 per cent as civilian aircraft and parts orders tumbled 22.7 per cent. Excluding volatile transportation orders, durables orders declined surprisingly by 1 per cent as manufacturing, machinery, metals and electrical equipment orders fell.
When defense orders were stripped out, durables orders dropped 3.2 per cent. Analysts were expecting durables to rise 0.3 per cent ex-transportation and to gain 0.5 per cent outside defense.
