Orders for U.S. durable goods rose more than forecast in May, reflecting broad-based gains that signal manufacturing is stabilizing.
Bookings for goods meant to last at least three years climbed 3.6 percent for a second month, the Commerce Department reported today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 3 percent increase. Excluding transportation equipment, where demand is volatile month to month, orders advanced 0.7 percent, also topping projections.
Growing demand for cars and trucks and gains in homebuilding are helping counter weakness in export markets, benefiting manufacturers such as BorgWarner Inc. (BWA) and United Technologies Corp. (UTX) Businesses may also decide to replace aging equipment, which will help bolster expansion in the second half of 2013.
“This is the missing piece for an upswing in economic activity,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York. “Business capital investment activity is off to a strong showing. If businesses start investing, they’ll add to their workforce.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.7 percent to 1,576.5 at 8:50 a.m. in New York after the People’s Bank of China said it will keep money-market rates at reasonable levels.
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