Demand for long-lasting U.S. manufactured goods rebounded more than expected in May and a gauge of business spending plans increased, but slowing global growth suggest the momentum might not be sustained.
Durable goods orders increased 1.1 per cent, the Commerce Department said on Wednesday, after a revised 0.2-per-cent decrease the prior month.
Economists polled by Reuters had forecast orders for durable goods, which range from toasters to aircraft and are meant to last more than three years, rising 0.4 per cent after previously being reported as being flat in April.
Orders were lifted by a 2.7 per cent jump in transportation equipment as aircraft bookings picked up and motor vehicles demand increased, though at a slower pace than in the prior month.
Excluding transportation, orders rose 0.4 per cent after dropping 0.6 per cent in Apri l. Economists had forecast this category rising 0.7 per cent.
Slower growth in China and a looming recession in the debt-crisis ridden euro zone have taken some of the shine off the domestic manufacturing sector, leaving the economy mired in a soft patch.
Regional surveys of factory activity have mostly shown a weakening in orders this month, a trend that is likely to be highlighted in a report on national manufacturing next week.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 1.6 per cent after dropping 1.4 per cent in April and snapping two straight months of declines.
Economists had expected this category to rise 1.7 per cent after a previously reported 2.1 per cent drop.
Shipments of non-defense capital goods orders excluding aircraft, used to calculate equipment and software spending in the gross domestic product report, rose 0.4 per cent after declining 1.5 per cent in April.
Last month, orders for civilian aircraft rose 4.9 per cent and motor vehicles climbed 0.5 per cent.
Boeing received eight orders for aircraft, according to the plane maker's website, up from four in April.
Outside transportation, details of the report were fairly mixed, with increases in machinery, electrical equipment and appliances and capital goods orders increasing. Demand for primary metals and computers fell.