Wednesday June 24, 02:40 PM
Orders for US durable goods surge in May
WASHINGTON (AFP) - Orders for US long-lasting manufactured goods surged unexpectedly in May, government data showed Wednesday in a report pointing to recovery in the embattled sector amid the prolonged recession.
The Commerce Department said durable goods orders rose a seasonally adjusted 1.8 percent in May from April.
The increase surprised most analysts, who had projected a decline of 0.9 percent.
The Commerce Department said orders for durable goods, such as household appliances, computers and aircraft, rose in April by a revised 1.8 percent, instead of the 1.9 percent initially estimated.
The last time durable goods orders had surged so strongly was in December 2007, when the world's largest economy officially entered recession.
After having fallen for six consecutive months until January, durable goods orders have increased in three of the past four months, the department noted.
Still, since the beginning of the year, durable goods orders are down 26.8 percent from the same five-month period in 2008.
Excluding the highly volatile transportation sector, durable goods orders leapt a robust 1.1 percent, after a 0.4 percent gain in April.
If the defense sector is excluded, durable goods orders advanced 1.4 percent in May, accelerating from a 0.6 percent rise in April. Measured this way, orders climbed in May for the second month running, after eight straight months of declines.
Orders for durable goods excluding defense and aviation, which generally signal companies' investment in their means of production, soared 4.8 percent in May, the sharpest jump since September 2004.
However, that gain benefited from comparison with the revised 2.9 percent decline in April, significantly worse than the 2.1 percent drop initially estimated.
A plunge in business investment amid the global financial crisis had been a prime factor in the economy's sharp contraction in the 2008 fourth quarter and the first quarter of 2009.
According to the department, shipments of US durable goods fell for the 10th consecutive month in May, down 2.1 percent from April, when they slipped 0.5 percent.
Unfilled orders for durable goods slid for the eighth month running, by 0.3 percent.
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