Ahead of the Bell: US durable goods

Orders to US factories for long-lasting manufactured goods expected to slip in May

Associated Press
US durable goods orders stumbled in February
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In this March 13, 2015 photo, a worker inspects a new 2015 aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant, in Claycomo, Mo. The Commerce Department releases its February report on durable goods on Wednesday, March 25, 2015. (AP Photo/Charlie Riedel)

WASHINGTON (AP) -- The Commerce Department releases its May report on orders to U.S. factories for durable goods at 8:30 a.m. Eastern Tuesday.

ANOTHER DROP: Economists expect that orders for durable goods, items expected to last at least three years, likely fell 0.5 percent in May from April, according to a survey by the data firm FactSet. Durable goods orders dropped 1 percent in April after surging 5.1 percent in March.

A key category that tracks business investment plans — orders for non-military capital goods excluding aircraft — slid 0.3 percent in April.

CLOBBERED BY THE DOLLAR: U.S. manufacturing has struggled this year, partly because a sharp rise in the value of the dollar since mid-2014 has made U.S. goods more expensive overseas and pinched exports. Cheaper oil prices also mean energy firms are buying less equipment.

Last week, the Federal Reserve said manufacturing output dropped 0.2 percent in May.

The Federal Reserve Bank of New York also reported that factory activity in New York state contracted in June. But factories around Philadelphia expanded this month at the fastest pace since December, the Philadelphia Fed reported last week.

Despite their troubles, factories keep hiring, though at modest levels. The Labor Department reported that manufacturers have added jobs 22 straight months through May, longest streak since the late 1970s.

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