MW Durable-goods orders post biggest gain in 11 years, but it doesn't mean the economy is speeding up

By Jeffry Bartash

Flush of Boeing contrasts mask weakness in business investment

The numbers: Orders for long-lasting goods skyrocketed 16% in May to mark the biggest increase in 11 years, but the headline number was exaggerated by a flush of new Boeing contracts that masked ongoing weakness in business investment.

The increase in durable-goods orders last month more than offset a 6.6% decline in April. Orders have seesawed this year in response to on-again, off-again U.S. tariffs.

The overall trend in orders and business investment, however, remains soft. Many companies have been waiting for a resolution of U.S. trade disputes before forging ahead with big projects.

Economists polled by the Wall Street Journal had forecast a 6.5% increase in durable-goods orders in May.

Key details: Orders for passenger planes soared 231% in May after a 52% decline in April.

Stripping out transportation, new orders for manufactured goods rose a solid 0.5% in May, the government said Thursday. Plane and auto orders can mask broader trends in the economy.

Business investment, meanwhile, jumped 1.7% as measured by a category known as "core" orders. These orders tend to hint at the future performance of the U.S. economy.

Core orders shrank 1.4% in April and are rising below the historical average.

Big picture: Tariffs benefit some manufacturers, such as steelmakers, but they're just an added cost for most other businesses.

For now, manufacturers are trying to manage costs and avoid antagonizing customers while the Trump White House negotiates new trade deals with other countries.

The U.S. economy is expected to grow more slowly this year as it adapts to the highest tariffs since World War II.

Looking ahead: The latest durables-goods report suggests "the trend in business investment in equipment is slowing due to trade uncertainty," said economist Katherine Judge of CIBC Economics.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX rose again in Thursday trading.

-Jeffry Bartash

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June 26, 2025 10:02 ET (14:02 GMT)

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