Durable Goods Orders Dip After 3 Straight Gains

New orders for “big ticket” durable goods, depressed by a slump in demand for military hardware, edged down 0.1% in May, the first decline in four months, the Commerce Department said Tuesday.

The department said orders for durable goods, items expected to last three or more years, declined to $106.9 billion last month, following a 0.7% increase in April.

All of the weakness came from a 13.1% fall in orders for defense equipment, a highly volatile category that had posted three consecutive months of sizeable increases.

Without the defense decline, durable goods orders would have risen 1.4% last month, the best showing since a 4.5% increase excluding defense in February.

The key category of non-defense capital goods posted a 5.8% increase to $29.9 billion in May.

Commerce Secretary Malcolm Baldrige said that durable goods orders have “strengthened appreciably this year, following three years of flat performance.”

He predicted that the trend will continue because of rising export sales by American manufacturers, aided by declines in the value of the dollar that have made their products competitive once again.