Durable goods are still a reliable site of deflation and overproduction in the global economy.
U.S. orders for durable goods posted an unexpected drop in May, a government report showed Thursday, as weakness in demand for autos dragged the measure lower for a second straight month.Last week the General reported that year-over-year durable goods production in the US was +6.4% while prices shifted -3.1%. In manufacturing outside food (mostly dairy and beef) and energy, its lots more production without lots more consumption, the Betty Crocker recipe for deflation.
The Commerce Department said orders for durable goods -- those meant to last at least three years -- fell 1.6 percent in May after a revised 2.6 percent decline in April. Excluding transportation-related orders, however, orders were off a smaller 0.7 percent, Commerce said.
The slide took Wall Street by surprise. Analysts had been looking for a 1.4 percent gain in May.
The declines in May and April were the first back-to-back monthly drops in durables orders since November and December 2002, according to Commerce, and may raise doubts about the U.S. factory sector's recent revival. . . .
May's decline was not limited to transportation. Orders for computers and electronic products, machinery and fabricated metals all fell