US durable goods orders slid 2.2 per cent in May
Posted June 24, 2016 5:55 am.
Last Updated June 24, 2016 9:40 am.
This article is more than 5 years old.
WASHINGTON – Orders to U.S. factories for long-lasting manufactured goods dropped in May, reversing two months of gains and delivering more bad news for American manufacturers.
The Commerce Department said Friday that demand for durable goods slid 2.2 per cent last month after rising 3.3 per cent in April and 2 per cent in March. Orders for transportation equipment, which are often volatile, fell 5.6 per cent, pulled down by a 34.1 per cent plunge in orders for military aircraft and parts. A category that tracks business investment also fell for the second straight month.
American manufacturing has been hurt by cutbacks in the energy industry, a response to low oil and gas prices, and by a strong dollar, which makes American products costlier in foreign markets. Britain’s vote to leave the European Union Thursday is likely to push the dollar even higher.
Economists also say businesses may be reluctant to place orders for durable goods — items such as cars and dishwashers that are meant to last at least three years — because of uncertainty over the U.S. presidential election.
Last week, the Federal Reserve reported that U.S. industrial output fell 0.4 per cent in May from April, pulled down by a 4.4 per cent drop in auto production.
