New orders for U.S. factory goods fell in May on weak demand for transportation and defense capital goods, but growing order backlogs and lean inventories suggested the worst of the manufacturing downturn was probably over.
The Commerce Department said on Tuesday new orders for manufactured goods declined 1.0 percent after two straight months of increases. May’s drop was in line with economists’ expectations and followed a 1.8 percent increase in April.
The department also said orders for non-defense capital goods excluding aircraft fell 0.4 percent in May instead of the 0.7 percent drop reported last month. These so-called core capital goods are seen as a measure of business confidence and spending plans on equipment.
Core capital goods shipments, which are used to calculate business equipment spending in the gross domestic product report, dropped 0.5 percent in May as reported last month. Read more