TECHNOLOGY
New orders for key U. S. -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.
New orders for key U.S.-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 up to show an increase of 0.2 percent for April. They were previously reported to have risen 0.1 percent.
"We see the core data as consistent with soft business investment in the second quarter" said Blerina Uruci, an economist with Barclays.
The report added to growing worries that the strength of the acceleration in economic growth in the second quarter may not be as robust as expected, despite a drop in the unemployment rate to a 16-year low of 4.3 percent in May.
The economy grew at a tepid 1.2 percent annual rate in the first three months of the year. Recent data on retail sales, manufacturing production and inflation have been disappointing.
The Atlanta Federal Reserve left its second-quarter GDP growth forecast unchanged at a 2.9 percent annualized pace on Monday. The updated projection encompassed the durable goods data and last Friday's better-than-expected new home sales report.
In May, shipments of core capital goods fell 0.2 percent after rising 0.1 percent in April. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent in May.
Prices of U.S. Treasuries edged up after the data. U.S. stocks dipped in pre-market trading but had rebounded to trade mostly higher later in the session. The U.S. dollar erased earlier losses to trade firmer against a basket of currencies.
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.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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