Weak aircraft sales send US durable goods orders to 16-month low
The crisis at Boeing over the grounded 737 MAX aircraft weighed on US durable goods orders in May, helping push the closely watched economic indicator to its lowest level in 16 months, government data showed Wednesday.
Sales of big-ticket US-made durable goods fell for the second straight month, exacerbating a general slowdown in manufacturing orders.
Outside the volatile area of transportation, sales were a little stronger than expected but economists noted a softening trend.
Sales of US durable goods fell 1.3 percent to $243.4 billion in May, well below forecasts and the lowest level since January of 2018, according to the Commerce Department.
Sales have fallen in three of the last four months. And the May result put orders down 2.8 percent from the same month last year. A year ago, the same measure had instead showed a 10.2 percent increase.
Since the global grounding of its formerly top-selling 737 MAX aircraft, involved in two fatal crashes since last year, Boeing has faced a drought of orders.
And US sales of civilian aircraft in May fell nearly 30 percent, extending April's losses of nearly 40 percent.
Automobiles sales rose a tepid 0.6 percent, reversing some of April's steep losses.
Orders for defense equipment also fell sharply but sales of equipment for businesses -- seen as a proxy for business investment and activity -- recovered some of April's decline.
Outside the volatile transportation sector, things were a little rosier: sales rose 0.3 percent, slightly faster than the level economists were expecting.
Sales of primary metals, machinery and communications equipment all rose, helping offset notable losses for computers, electrical equipment and appliances as well as items made from metals.
Surveys of manufacturing activity have slowed in recent months.
Jim O'Sullivan of High Frequency Economics said the details of the report were stronger than the overall number "but there has been significant slowing."
"The manufacturing sector is disproportionately exposed to weakening in foreign demand."
? 2019 AFP