The United States durable goods orders experienced an unexpected increase in May because of a significant rise in aircraft purchases yet business investment faces ongoing challenges from trade policy uncertainty.
The Commerce Department announced that durable goods orders increased by 16.4% during May following a revised 6.6% decrease in April. The economic forecast predicted an 8.5% increase in orders.
The transportation sector led the market with a 48.3% increase because commercial aircraft bookings surged 230.8%. Boeing received 303 aircraft orders in May when Qatar Airways made a major purchase during President Donald Trump’s Gulf visit.
The growth in non-transportation sectors remained moderate. The 1.7% increase in non-defense capital goods orders excluding aircraft represented a key business investment indicator after April’s downwardly revised 1.4% drop.
The investment outlook remains uncertain because of ongoing trade tensions and unpredictable tariffs. Companies brought forward their imports during previous months to prevent new duties which created distorted demand patterns and made future planning more difficult.
The Federal Reserve maintains its current position while tracking the inflationary effects of tariffs. The Federal Reserve Chair Jerome Powell stated that the central bank requires additional clarity before making any policy adjustments. The Atlanta Fed predicts second-quarter GDP growth will reach 3.4% because of changing trade patterns instead of fundamental economic growth.
