Orders to U.S. factories for ``big ticket'' durable goods plunged 2.2 percent in May, the steepest dive in nine months, the government said today. The Commerce Department said orders for durables goods, items expected to last three or more years, totaled a seasonally adjusted $114.8 billion last month. It was the biggest drop in new orders since August, when orders plummeted 2.3 percent, and followed a 1.8 percent increase in April, revised upward from a previous estimate of 1.0 percent. The entire May decline can be accounted for by a precipitous 9 percent decline in orders for transportation equipment. At the White House, spokesman B. Jay Cooper called the report on new orders ``volatile. May's decline should not be cause for concern. Shipments continue to show strength and the backlog of unfilled orders remains high.'' ``More news that inflation remains under control. It is good news,'' Copper added. Economists were surprised by the report. Most had predicted a rise of more than 2 percent in orders on the strength of two big orders late in May to Boeing Commercial Airplanes Co., one from United Airlines, the other from American Airlines. But those orders apparently were not recorded in the Commerce Department's preliminary estimate of durable goods. Excluding transportation, orders increased 0.3 percent. Excluding just aircraft, overall orders increased 0.6 percent. Cynthia Latta, senior financial economist at Data Resources Inc., a Lexington, Mass., forecasting firm, said excluding aircraft and defense, order levels are ``not half bad.'' ``I think what we're seeing is what we want to see, which is continued growth, but maybe some moderation of the pace,'' she said. Stronger growth would inject inflation pressure into the economy, she said. Orders in the volatile defense goods category fell 16.6 percent to $8.3 billion, following an increase of 1.9 percent a month earlier. Excluding defense, orders declined 0.9 percent following a 1.8 percent rise in April. The key category of non-defense capital goods, considered a sign of business expansion plans, fell 6.9 percent last month, following a 3.4 percent rise a month earlier. Despite the setback in May, analysts still expect export-producing manufacturers to spend heavily on modernization and expansion. Orders for primary metals, such as steel, zoomed 5.5 percent following a 1.6 percent rise in April. Orders for electrical machinery also posted a strong gain, 3.5 percent, following a 5.0 percent rise a month before. There was a 2.4 percent decline in orders for non-electrical machinery, more than erasing a 1.2 percent gain in April. Shipments of durable goods rose 1.5 percent in May to $114.4 billion, following a 0.9 percent decline in April.
