US durable goods orders fall 1.3% in May with aircraft down

US durable goods orders drop 1.3% in May while demand in investment category shows slight increase

WASHINGTON -- Orders to U.S. factories for long-lasting manufactured goods fell sharply in May while demand in a category that tracks business investment rose modestly.

Orders fell 1.3% in May following an even bigger 2.8% drop in April, the Commerce Department reported Wednesday. That weakness reflected a sharp falloff in orders for commercial aircraft, a category that has been hurt by the troubles with Boeing's MAX aircraft, which has been grounded by global regulators after two fatal crashes.

The category that serves as a proxy for business investment edged up 0.4% in May after a 1% decline in April. It was the biggest gain since a 1.4% jump in January. Economists have been worried about a slowdown in business investment orders, believing it shows business concerns about rising trade tensions.

Trump will meet later this week with Chinese President Xi Jinping and investors are closely watching to see if two sides are able to restart the stalled trade talks. The fear is that an expanded trade war between the world's two biggest economies could depress global growth and raise the threat of pushing the U.S. expansion, which next month will become the longest on record, into a recession.

Orders in the volatile commercial aircraft category fell 28.2% in May after an even bigger 39.3% plunge in April.

Demand for motor vehicles and parts edged up 0.6% after a 3.2% decline in April. Automakers have faced problems with falling demand for new cars this year.

Orders for machinery rose 0.7% in May while demand for primary metals such as steel edged up 0.4% after a 2.4% drop in April.