Durable orders in surprise gain

Long-lasting manufactured goods orders increase 1.8% in May, third advance in past 4 months.

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WASHINGTON (Reuters) -- New orders for long-lasting U.S. manufactured goods rose by a much stronger-than-expected 1.8% in May, Commerce Department data showed Wednesday, providing further evidence that the battered U.S. economy was finding its feet.

Analysts polled by Reuters had forecast durable goods orders would decline 0.6% last month. May's increase, the third gain in 4 months, followed a revised 1.8% gain in April, previously reported as a 1.7% rise.

New orders excluding transportation advanced 1.1% last month, compared with a forecast for a 0.4% decline, buoyed in part by a 7.7% rise in new machinery orders. This was the largest percentage increase in that category since March 2008, the Commerce Department said.

Orders excluding defense were 1.4% higher, versus a Reuters' poll prediction for a 0.4% drop.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, jumped 4.8% in May, the largest gain since September 2004, when they were up 8.2%. May's sharp rise compared with analyst forecasts for a 0.6% drop, and followed a revised 2.9% fall in April.

In one area of particular weakness, orders for motor vehicles and parts dropped 8.1% in May, the sharpest fall since August.

The Commerce Department said shipments of durable goods fell 2.1% in May, after falling 0.5% the month before.

This was the 10th straight decline in shipments, and the longest streak of consecutive monthly decreases since records began in 1992, the Commerce Department said. To top of page

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