Durable Goods Orders Drop 2.2%

New orders for expensive manufactured goods recorded their sharpest drop in nine months in May, the government said on Wednesday in a report that apparently missed several already announced aircraft orders.

Economists blamed the drop entirely on the delayed arrival of data on three big aircraft deals announced in May and saw nothing in it that would send the economy into a tailspin.

Orders for durable goods--items designed to last a least three years--dipped 2.2% in May from a record high April level to a seasonally adjusted $114.76 billion, the Commerce Department said.

The decline in the widely used measure of the economy’s vital manufacturing sector, which followed a 1.8% rise in April, was the first since January and the largest since a 2.3% drop last August.

Despite the surprising setback, orders for durable goods were still 7.5% above their year-ago level, while the backlog of unfilled orders, which rose 0.1% in May, was 10.1% above its May, 1987, mark.

“There seems to be enough to keep the economy going even if there is some slippage in new orders,” said economist Cynthia Latta of Data Resources in Lexington, Mass. “I think it suggests that the economy is still plugging along.”

The White House said it was unconcerned about the drop.

“New orders are volatile, and May’s decline should not be cause for concern,” spokesman B. Jay Cooper said at a news briefing. “Shipments continue to show strength and the backlog of unfilled orders remains high.”

Big Orders Not Included

Economists doubted whether new orders actually fell. The department blamed two-thirds of the decline on a sharp 16.6% drop in defense orders, which tend to be volatile from month to month.

An even bigger reason for the decline was a large drop in aircraft orders, including some for military purposes, which also tend to be erratic, Commerce Department officials said.

Excluding defense, total durable goods orders would have fallen only 0.9% in May and excluding aircraft, they would have risen 0.6%, they said.

The report apparently did not include three large orders announced by Boeing Co. last month for at least 180 commercial planes valued at about $8 billion, leaving economists wondering what happened to them.

“Who knows?” said economist Tom Megan of Evans Economics in Washington. “It’s a Bermuda triangle with those orders.”