Jun 27, 2023 - Economy

Good news on durable goods

Data: Census Bureau; Chart: Axios Visuals

Demand for big-ticket items strengthened in May, the latest sign of resilience in the U.S. economy.

By the numbers: Overall new orders for durable goods surged 1.7% last month, the Census Bureau said Tuesday morning, the third straight month of gain. That was driven in significant part by aircraft orders.

  • But promisingly, a key indicator of the outlook for business investment — nondefense capital goods orders excluding aircraft — rose 0.7% in May, building on an April rise. Analysts had expected that number to be flat.

Between the lines: The solid trend in capital goods spending is the latest piece of evidence that U.S. businesses are not in the kind of cash-conserving retrenchment mode you would expect to see in a recession.

What they're saying: "Today's report suggests a better industrial backdrop with signs of stronger demand for equipment, on the back of still-strong demand for labor," said Michael S. Hanson, an economist at JPMorgan Chase, in a note.

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