New orders for long-lasting US-made goods leaped by a larger-than-expected 5.5 per cent in May on a large gain in civilian aircraft orders, a government report showed today.
Excluding the volatile transportation category, orders for durable goods - big-ticket items meant to last three years or more - slipped unexpectedly by 0.2 per cent, the Commerce Department said. It was the third decline in the last four months for that category.
Analysts were expecting all durable goods orders to rise 1 per cent and for orders excluding transportation to gain 0.5 per cent. A 2.3 per cent drop in orders for non-defence capital goods excluding aircraft - seen as a proxy for business spending - pushed US Treasuries higher.
It was the biggest slide in that category since October 2004. The benchmark 10-year US Treasury note was up 8/32 to yield 3.925 per cent. The euro initially rose against the dollar, trading at $1.2089 soon after the durables report from about $1.2075 shortly prior.
The dollar was little changed against the yen. Analysts said that excluding big orders, the numbers suggested weakness among US manufacturers.
Orders excluding transportation were revised to a larger decline of 0.7 per cent. Orders for transportation equipment gained 21.2 per cent in May, the biggest rise since July 2002, on a 164.8 per cent surge in non-defence aircraft and parts orders.
Capital goods orders gained 14.5 per cent in the month, the biggest rise since October 2001, and non-defence capital goods rose by the same amount, a record high for that category. Orders excluding defence goods rose 5.3 per cent, ahead of analysts' forecasts of a 1.9 per cent increase.