Economy

Durable Goods Orders Surge in May

June 25, 2020

Orders for durable goods leapt 15.8 percent to $194.4 billion in May after plunging a revised 18.1 percent in April. The increase exceeded expectations and indicates the economy is in recovery, though orders are still well below pre-COVID levels.

Transportation orders surged 80.7 percent, primarily due to a rebound in automotive orders. Motor vehicle and parts orders climbed 28 percent in May after plummeting in March and April. Orders for commercial airlines made some gains after registering negative numbers in the previous two months. New commercial aircraft orders totaled $3.1 billion, while defense aircraft orders climbed 6 percent to $4.2 billion.

Core capital goods, nondefense goods excluding aircraft and considered a proxy for future business investment, edged up 2.3 percent last month.

The metals industry posted an increase in orders in May. Primary metals orders jumped 9.1 percent month-over-month and orders for fabricated metal products grew 7.4 percent.

The U.S. Census Bureau’s May advance report on durable goods manufacturers’ shipments, inventories and orders follows:

New Orders

New orders for manufactured durable goods in May increased $26.6 billion or 15.8 percent to $194.4 billion. This increase, up following two consecutive monthly decreases, followed an 18.1 percent April decrease. Excluding transportation, new orders increased 4.0 percent. Excluding defense, new orders increased 15.5 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase by $20.9 billion or 80.7 percent to $46.9 billion.

Shipments

Shipments of manufactured durable goods in May, up following two consecutive monthly decreases, increased $8.4 billion or 4.4 percent to $198.5 billion. This followed an 18.6 percent April decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase by $5.0 billion or 12.1 percent to $46.5 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in May, up following two consecutive monthly decreases, increased $0.8 billion or 0.1 percent to $1,108.6 billion. This followed a 1.5 percent April decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase by $0.3 billion to $760.0 billion.

Inventories

Inventories of manufactured durable goods in May, up three consecutive months, increased $0.3 billion or 0.1 percent to $425.1 billion. This followed a virtually unchanged April increase. Transportation equipment, up 22 of the last 23 months, drove the increase by $1.3 billion or 0.9 percent to $144.1 billion.

Capital Goods

Nondefense new orders for capital goods in May increased $13.4 billion or 27.1 percent to $62.8 billion. Shipments increased $0.3 billion or 0.4 percent to $63.5 billion. Unfilled orders decreased $0.7 billion or 0.1 percent to $624.0 billion. Inventories increased $1.1 billion or 0.6 percent to $191.2 billion. Defense new orders for capital goods in May increased $2.2 billion or 19.9 percent to $13.3 billion. Shipments decreased less than $0.1 billion or 0.1 percent to $12.4 billion. Unfilled orders increased $0.9 billion or 0.5 percent to $180.0 billion. Inventories decreased $0.1 billion or 0.4 percent to $21.0 billion.

Revised April Data

Revised seasonally adjusted April figures for all manufacturing industries were: new orders, $382.5 billion (revised from $384.3 billion); shipments, $404.8 billion (revised from $406.8 billion); unfilled orders, $1,107.8 billion (revised from $1,107.6 billion); and total inventories, $685.8 billion (revised from $686.5 billion).