(Bloomberg) -- U.S. orders for durable goods jumped in May by the most in nearly six years as nationwide reopenings rekindled demand for a broad range of merchandise and equipment.
Bookings for durable goods -- or goods meant to last at least three years -- surged 15.8%, the most since July 2014, after a revised 18.1% decline in April, Commerce Department data showed Thursday. That compared with the median estimate in a Bloomberg survey of economists for a 10.5% increase. Core capital goods orders, a category that excludes aircraft and military hardware, increased 2.3%, more than twice the median projection.
The rebound in orders reflects the beginning of the manufacturing sector’s gradual road to recovery after pandemic-related supply chain disruptions and lockdowns battered the industry and restrained sales. Even so, orders valued at $194.4 billion in May remain far short of where they were just three months earlier, suggesting the path to recovery will be a long one.
Shipments of core capital goods, a figure economists use to calculate gross domestic product, climbed 1.8% in May. GDP in the second quarter is forecast to post its steepest annualized decline in records dating back to the 1940s. In the first quarter, GDP shrank an annualized 5%, the government’s third estimate showed Thursday.
Transportation equipment orders jumped nearly 81% in May, including a 27.5% increase in motor vehicles and parts. The value of commercial aircraft bookings rose to $3.1 billion after a decline of $8.6 billion, which reflected order cancellations. Nondefense capital goods orders including aircraft rose 27.1% in May.
Excluding transportation, durable goods orders increased 4% after falling 8.2%.
A separate measure of manufacturing activity, out Tuesday, showed the sector is on the mend. IHS Markit’s manufacturing gauge rose in June to the highest level since February but remained in contraction.
(Adds capital goods shipments in fourth paragraph, more details)
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