U.S factory orders posted a stronger than expected rebound in May, buoyed by orders for ships, boats and aircraft, according to figures released Tuesday by the Commerce Department.
The Commerce Department put the level of new orders for manufactured goods at $469.0 billion, a 0.7 percent increase that partially reverses two consecutive months of declines.
Although the April level of factory orders was revised down to show a 0.7 percent decline compared to the 0.6 percent decrease initially reported, the May increase comes in significantly strong than the 0.1 percent growth predicted by most economists.
Orders for transportation equipment were especially strong in May, posting a 2.7 percent increase.
Much of the increase in transportation orders can be attributed to the maritime and aviation sectors, where the high costs of individual ships and aircraft can make month-to-month figures somewhat volatile.
New orders for ships and boats increased 7.9 percent in May, while civilian aircraft orders were up 4.9 percent and defense aircraft orders were up 6.9 percent.
However, new orders for motor vehicle bodies, parts and trailers, a less volatile segment of the transportation sector, were also up 1.3 percent.
The overall increase in transportation orders was the largest month-to-month increase on a percentage basis since December.
Excluding transportation, new factory orders were up 0.4 percent, an increase that also reverses two consecutive months of declining orders.
New defense spending in May also boosted the overall level of new factory orders, with non-defense factory orders up 0.5 percent.
Durable goods factory orders posted a 1.3 percent increase in May, upwardly revised from the 1.1 percent increase initially estimated, while non-durable goods orders were up 0.2 percent for the month.
Orders for electrical equipment, appliances and machinery posted strong increases in May, while orders for primary metals fell by 1.8 percent and orders for computer and electronic equipment ticked down 0.1 percent.
The report also showed that orders for non-defense capital goods excluding aircraft, an indicator of business spending, jumped 2.1 percent in May following a 1.5 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.