Orders for U.S. durable goods fell unexpectedly in May, driven lower by a drop in defense-related orders, while a measure of business spending plans improved, the government reported Wednesday.
The Commerce Department said orders for durable goods - expensive manufactured items expected to last at least three years - fell 1 percent last month as demand for transportation, machinery, computers and electronics products, electrical equipment, appliances, and defense goods all declined.
But excluding defense items, durable-goods orders actually rose 0.6 percent in May, following a 0.8 percent drop the previous month. Factories reported higher demand for steel and other metals, computers, and automobiles.
Orders for core capital goods - a closely watched measure of business spending plans - increased 0.7 percent last month after dropping 1.1 percent in April. The increase in non-defense capital goods excluding aircraft points to some acceleration in business spending, which should support second-quarter growth.