Orders for business equipment rose in May for just the second time this year, indicating demand for American-made manufactured goods is stabilizing.
Bookings for non-military capital goods excluding aircraft rose 0.4 percent last month after a 0.3 percent decrease in April, data from the Commerce Department showed Tuesday in Washington. Orders for all durable goods — items meant to last at least three years — declined 1.8 percent, reflecting a drop in the volatile aircraft category.
The data indicate the worst of the slump in business investment in the oil patch may be over as fuel costs steady, which would alleviate a source of weakness for the economy. Exports will probably take longer to rebound as the dollar’s appreciation makes American-made goods less competitive globally.
It’s “a welcome shift after recent declines,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who correctly forecast the increase in capital goods orders. “So long as energy prices remain reasonably stable and the dollar doesn’t appreciate too much more dramatically, we’ll see core durable goods orders trend back.”
Stock-index futures rose, indicating equities will gain a second day, on optimism that a deal on Greek aid is within reach. The contract on the Standard & Poor’s 500 Index maturing in September climbed 0.2 percent to 2,116.8 at 8:50 a.m. in New York