U.S. Durable Goods Orders Rebound

New orders for durable goods improved 1.9% last month following an April decline of 2.7%, initially reported as -3.6%. The latest increase matched Consensus expectations. Transportation sector orders rebounded 5.8% (14.7% y/y) as bookings for aircraft & parts jumped by one-quarter (26.2% y/y). Orders for motor vehicles & parts ticked up all of 0.6% after April's 5.3% decline due to the earthquake in Japan.

Outside of the transportation sector, orders improved a slight 0.6% after the 0.4% April downtick. The y/y gain of 7.2% compares to 18.5% this time last year. Electrical machinery orders rose 3.2% (6.6% y/y) and machinery orders rose 1.2% (11.2% y/y). Orders for computers rose 1.3% (8.0% y/y) and reversed all of April's decline, but that y/y gain compares to 30.0% growth last summer. In the capital goods sector the trend gain has weakened, much of that due to commercial aircraft where orders have been roughly unchanged for a year. Excluding aircraft, orders jumped 1.6% last month, though the 10.5% y/y increase is half that this time last year.

Shipments of durable goods inched up 0.3% last month after April's 1.4% drop. The 6.2% y/y growth equaled that of 2010 and roughly equaled the gain in production of durable goods. Shipments of motor vehicles and parts rose 10.4% y/y. Less transportation altogether, the 6.3% y/y gain is half that early in 2010.

As the level of orders remained higher than shipments, unfilled orders continued to rise. The 0.9% May increase pulled them up 6.3% y/y. Less transportation the gain is a stronger 13.6% due to a one-third surge in machinery and a one-quarter jump in electrical equipment. The rate of inventory accumulation remained a strong 1.2% last month (13.0% y/y).

The durable goods figures are available in Haver's USECON database. The expectation figure is in the AS1REPNA database.