On June 24, the U.S. Department of Commerce released May orders data for durable goods (i.e., items that can be used for at least three years). Driven by a sharp increase in aircraft and automobile orders, U.S. durable goods orders in May hit the largest increase since January this year.
The data showed that the preliminary monthly rate of U.S. durable goods orders in May actually posted 2.3%. Previously, the market expected that the preliminary value of U.S. durable goods orders in May would rebound significantly, but disappointed the market, and did not exceed the expected value of 2.8%.
U.S. durable goods orders unexpectedly fell 1.3% YoY to $246.2 billion in April, a figure that hit a new low since April 2020, so May’s data showed a strong YoY increase.
However, non-defense capital durable goods orders, net of aircraft, rose 2.3% in April from a year earlier, well above expectations of 1.0%. Analysts believe that the decline in durable goods orders in April is temporary.
U.S. durable goods orders data for May showed that non-defense capital durable goods orders, net of aircraft, rose just 0.3% from a year earlier, a sharp slowdown from the past two months.
Market analysis suggests that the remarkable recovery in durable goods orders and shipments during the epidemic recession will begin to lose momentum in the second half of 2021.
CIMB notes.
U.S. home sales lead durable goods orders by six months, implying that durable goods orders are about to top out, but will not fall back soon within the year.
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