New orders for durable goods soared 5.5% in May, lifted by aircraft & parts orders which more than doubled m/m. Consensus expectations had been for a 1.5% rise.

The 125% surge in orders for aircraft raised transportation equipment orders by 21.2%. A 0.2% (-1.6%) gain in motor vehicles & parts also contributed.

Less transportation durable orders fell 0.2% (+6.6% y/y) for the third slight decline in the last four months. Computer & electronic equipment orders fell 1.2% (+5.2% y/y), the second consecutive monthly decline, and machinery orders fell 1.9% (+8.7% y/y). Electrical equipment orders rose 0.3% (4.2% y/y) and "other" orders rose 1.8% (6.3% y/y).

Orders for non-defense capital goods rose 14.5% on the strength of the orders received by Boeing. Less aircraft capital goods orders fell 2.3% and shipments rose just 0.2% (12.2% y/y). During the last four months shipments have fallen 1.1%.

Durable inventories rose 0.3% (8.7% y/y) following no change in April. Less transportation inventories also rose 0.3% (9.8% y/y).

Unfilled orders jumped 1.9% (7.6% y/y) but outside of the transportation sector backlogs fell slightly (+7.7% y/y). The ratio of backlogs to shipments outside of transportation has been moving erratically sideways since early last year.

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