New orders for U.S. manufactured durable goods declined by 4.5% in May to $332.1 billion, according to the advance report released by the U.S. Census Bureau today, June 25, 2026. This drop snapped a two-month winning streak, pulling back from an upwardly revised 8.5% surge in April, but coming in slightly better than the consensus forecast of a 5.0% contraction.
📊 Key May Durable Goods Data
- Headline New Orders -4.5% Driven by a sharp, expected drop in aircraft orders.
- Orders Excluding Transportation +1.3% Outpaced estimates (+0.6%), showing solid core factory demand.
- Orders Excluding Defense -4.6% Highlights how private commercial sectors slowed headline growth.
- Core Capital Goods (Ex-Aircraft) +1.6% Rebounded strongly, acting as a proxy for business spending plans.
🔍 Primary Drivers of the May Report
- The Transportation Drag: The overarching factor behind the headline drop was a 14.0% plunge in transportation equipment, which fell to $113.5 billion. This sector was weighed down primarily by volatile nondefense aircraft and parts orders, which collapsed by 51.8% following a blockbuster April.
- Core Manufacturing Strength: Stripping out the highly volatile aviation sector reveals a robust manufacturing backbone. Orders for items excluding transportation rose 1.3%, while durable goods shipments expanded by 1.0% to $327.9 billion, marking increases in eight out of the last nine months.
- Underlying Corporate Investment: In a highly positive signal for economic expansion, orders for non-defense capital goods excluding aircraft rose 1.6%. This directly reversed a 0.7% contraction in April and beat market forecasts of a mild 0.6% gain.
💡 Economic Implications
The May data portrays a nuanced, "two-speed" manufacturing sector. While headline figures look weak due to commercial aviation corrections, the underlying core metrics indicate that U.S. businesses are continuing to invest in machinery and long-lasting equipment. Combined with today’s hotter PCE inflation and stronger final Q1 GDP, this underlying economic strength keeps pressure on the Federal Reserve to sustain higher interest rates.
If you would like, I can:
- Provide deeper details on the nondefense aircraft order volatility
- Explain what core capital goods tells us about future GDP
- Compare this report to recent Manufacturing PMI data
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