Durable Goods Orders Strong in May, Underlaying Strength Stronger

The U.S. Census Bureau reported orders for manufactured durable goods increased $1.8 billion or 0.4% to $498.2 billion. The headline durable goods orders number has risen for 3 of the last 4 months, but the underlaying strength in the report is even stronger.

Even with the 0.4% dip in April, there was a strong build in unfilled orders.

Shipments, up 12 of the last 13 months, rose $2.8 billion or 0.6% to $496.1 billion, following a 0.1% increase in April. Unfilled orders, up 6 of the last 7 months, gained $6.2 billion or 0.5% to $1,160.8 billion. This followed a 0.6% April increase.

The unfilled orders-to-shipments ratio was 6.68, down from 6.73 in April. Inventories, up 19 consecutive months, gained $1.3 billion or 0.2% to $668.4 billion after a 0.4% increase in April. The inventories-to-shipments ratio was 1.35, unchanged from April.

New Orders

New orders for manufactured durable goods in May, which have been down for 2 consecutive months, fell $0.9 billion or 0.4% to $249.2 billion. That’s up from the previously published 0.6% loss and followed a 1.0% dip in April. Transportation equipment, also down 2 consecutive months, fueled the decrease with a $0.9 billion or 1.1% decline to $86.1 billion.

New orders for manufactured nondurable goods increased $2.7 billion or 1.1% to $249.0 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in May, up six of the last seven months, increased $6.2 billion or 0.5% to $1,160.8 billion. That’s unchanged from the previously published increase and follows a 0.6% increase in April. Transportation equipment, also up 6 of the last 7 months, led the increase, $3.9 billion or 0.5% to $800.2 billion.