New orders for durable goods spiked in May as orders for transportation equipment, especially aircraft, rose significantly.
May’s seasonally adjusted new orders for durable goods landed at $343.6 billion in May, up 16.4% month over month after a revised 6.6% drop in April, according to the Monthly Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders, released by the U.S. Census Bureau today. Meanwhile, seasonally adjusted shipments for durable goods were $301 billion, up 0.2% MoM following a revised 0.3% increase for April.
Core Capital Goods – Shipments & New Orders

The seasonally adjusted value of core capital goods orders, which excludes aircraft and defense equipment, totaled $76 billion, up 1.7% MoM following a revised April decrease of 1.4%. Seasonally adjusted shipments for core capital goods totaled $75.8 billion in May, up 0.5% MoM from a revised 4 basis point (bps) decline in April.
Equipment finance new business volume during May suggested a 0.7% increase in new durable goods orders, which the market exceeded, according to the Equipment Leasing and Finance Association. Equipment finance new business volume dropped by 3.7% year over year on a non-seasonally adjusted basis.
Spike likely unsustainable
Orders for transportation equipment jumped 48.3% MoM, due largely to a 230.8% jump in civilian aircraft orders, according to the report. The increase in orders is similar to a sizeable increase in 2014, which means a significant drop in orders likely lies ahead, according to a Wells Fargo research note.
“The 16.4% pop in durable goods orders in May is the biggest headline increase since 2014, when a bumper crop of aircraft orders boosted the headline number in a dramatic way,” according to the note. “No one is saying that is what to expect in the remaining months of this year, but payback next month is very likely and our forecast looks for a soggy patch for capital investment in the second half.”
For comparison, durable goods orders surged 26.4% during the previous spike in July 2014, then dropped 21.2% in August, according to the note. The decline continued in each month for the rest of the year.
Unfilled orders, total inventories
Seasonally adjusted unfilled orders for durable goods totaled $1.5 trillion in May, up 3.4% MoM after a revised 0.8 bps dip in April, according to the report. Seasonally adjusted total inventories for durable goods were $587.8 billion in May, up 0.2% compared with a revised 0.1% increase in April.
Meanwhile, seasonally adjusted unfilled orders for core capital goods reached $300.6 billion in May, up 0.1% MoM from a revised 0.2% April decrease. Seasonally adjusted total inventories for core capital goods hit $182.7 billion in May, up 0.3% after a 0.1% revision for April.
Core Capital Goods – Total Inventories & Unfilled Orders
Durable goods shipments slightly exceeded expectations in May, but flat capital goods shipments and modest gains excluding aircraft suggest weak real equipment investment in the second quarter as part of an overall economic slowdown, according to the Wells Fargo note.
“Advance data showing a collapse in exports and stalling in imports suggests the U.S. goods trade deficit widened in May and net exports may not boost growth as much as we previously anticipated,” according to the note. “U.S. growth is shaping up to be a bit weaker in the first half of the year.”
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