‘We see the core data as consistent with soft business investment in the second quarter.’ – Blerina Uruci, Barclays
Orders for US-made durable goods dropped more than expected last month, pointing to a slowdown in the manufacturing sector. The Commerce Department reported on Monday that durable goods orders fell 1.1% in May, following the preceding month’s downwardly revised drop of 0.8% and falling behind expectations for a 0.5% decline. In the meantime, core durable goods orders rose just 0.1% last month after dropping 0.5% in April, whereas analysts anticipated an increase of 0.4% during the reported month. Monday’s data combined with the prior week’s retail sales and inflation figures suggested that the economy failed to regain positive momentum in the June quarter despite the recent sharp drop in the jobless rate. Back in the Q1, the US economy expanded at an annualised 1.2% pace. Yesterday’s data also showed that orders for machinery climbed 0.6%, while shipments dropped 0.3%. Orders for civilian aircraft dropped 11.7%, whereas orders for defence aircraft and parts plunged 30.8%. Orders for motor vehicles and parts advanced 1.2% last month.
