WASHINGTON: US durable goods orders fell more than expected in May after increasing the two prior months, in fresh evidence Friday of the weakness in the American manufacturing sector.
New orders for manufactured durable goods like cars, aircraft, electronics and machinery fell 2.2 percent in May after a 3.3 percent jump in April, the Commerce Department reported. Analysts on average forecast a modest 0.6 percent decline.
"A pullback in May was expected but the larger than anticipated, broad-based decline serves to reinforce underlying weakness," said Sophia Kearney-Lederman, an economic analyst at FTN Financial.
Kearney-Lederman pointed to the impact of the strong dollar, which has only surged higher following Britain's unexpected vote Thursday to exit the European Union.
"A strong dollar and softening global growth has weighed on demand for US goods for much of the last two years. So far today, post-Brexit, the dollar has strengthened nearly 2.3 percent," she said in a client note.
The volatile transportation sector was a leading factor in the May downturn.
New transportation orders, which typically swing sharply month-over-month, tumbled 5.6 percent in May. Orders for defense aircraft dived 34.1 percent. Commercial aircraft orders rose a modest 1.0 percent after soaring in April.
New orders for motor vehicles fell 2.8 percent in May, reflecting a slight cooling in US auto sales.
Excluding transportation, durable goods orders fell 0.3 percent from April.
Comments
Comments are closed.