Orders for durable goods nosedived in May, suggesting that sunny forecasts for business spending may be overly optimistic. The 2.8% drop, the first decline in 4 months, nearly tripled the predicted 1% dip, Bloomberg reports. Excluding the volatile transportation sectors, the figure was off 1%, Commerce Department stastics released today showed, against a projected .2% rise.
Demand for products designed to last longer than 3 years had risen 1.1% in April, the third straight month of gains and a sign of economic growth. Analysts didn't expect the manufacturing sector to maintain that pace, but the disparity raised concerns. Says one economist: "It's clear that businesses are being cautious in light of the softness in the economy." (Read more durable goods stories.)