Driven by strength in the transportation sector, U.S. durable goods orders rebounded by more than expected in the month of May, according to figures released Wednesday by the Commerce Department.
New orders for manufactured durable goods increased $2.3 billion in May, a 1.1 percent increase over revised April levels.
However, the April level of durable goods orders was downwardly revised to show a 0.2 percent decline compared to the previously reported decrease of less than a tenth of a percent.
The May increase partially reverses two consecutive months of declining durable goods orders, with a sharp 3.7 percent drop recorded for March.
Most economists had expected the rebound, though most estimates called a more conservative 0.4 percent growth rate.
Transportation equipment orders, up 2.7 percent, powered the May increase in overall durable goods orders.
Excluding orders for transportation equipment, durable goods orders increased by 0.4 percent in May compared to a 0.6 percent drop in the previous month.
However, most economists had been expecting to see a 0.8 percent increase in ex-transportation orders given the volatility of the transportation sector.
Defense spending also fueled some of the greater than expected increase in durable goods orders for May, though civilian or non-defense durable goods orders posted a 0.7 percent increase for the month.
Orders for machinery showed a notable 4.1 percent increase, while orders for communications equipment jumped by 2.3 percent. Meanwhile, orders for primary metals fell by 1.5 percent.
The report also showed that orders for non-defense capital goods, excluding aircraft, an indicator of business spending, rose 1.6 percent in May following a 1.4 percent drop in April.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.