June 24, 2004 10:00 AM, EDT

Orders for Durable Goods Decline 1.6% in May

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rders for durable goods dropped 1.6% in May, the second consecutive fall, the Commerce Department reported Thursday.

Durables, which are goods made to last at least three years, decreased to $189.1 billion after falling a revised 2.6% in April. This was the first time durable orders declined two straight months since November-December 2002.

Economists had expected durable goods orders to rise 1.5% to $193.8 billion. Excluding transportation equipment, orders fell 0.7% following a 1.7% decrease.

A decrease in orders for durable goods would likely lower the amount of goods produced by factories for shipment by truck.

Commerce said that orders for transportation equipment dropped 4.1% after falling 4.6% in April.

Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, fell 3% last month after declining 2% in April.

Machinery orders decreased 0.6% last month after falling 4% in April.