Unexpected Drop In Durable Goods Adds To Disappointing Data

The Commerce Department said orders for long-lasting goods dropped 1 percent in May, missing Wall Street’s expectations that orders would remain unchanged from the month prior. Excluding the transportation component, orders fell by 0.1 percent.

Durable goods are classified as products meant to last three years or more. The measurement was way off from the 0.4 percent gain economists forecast, and added to another piece of disappointing economic data that sent shockwaves through Wall Street.

The Commerce Department reported Wednesday that the U.S. economy contracted at an annual rate of 2.9 percent in the first quarter, clocking in at the largest drop since the first quarter of 2009. The latest report reflected an increase from the previous estimate of a contraction of 1 percent.

Wall Street expected the world’s biggest economy — soon to be the second-largest if conditions don’t turn around — to shrink by an annual rate of 1.7 percent.

Growth has now been revised down by a total of 3.0 percentage points since the government’s first estimate was released back in April, and the measurement represents the worst performance ever during a period that was supposedly not an economic recession.