U.S. durable goods orders soared by a stunning 16.4% in May, driven largely by a flood of commercial aircraft purchases, according to new Commerce Department data released Thursday.
The rise is partly attributed to a major deal tied to President Donald Trump’s visit to Qatar.
The jump follows a sharp 6.6% drop in April, marking a dramatic turnaround in manufacturing demand. Economists had only forecast an 8.5% rise, making May’s figures nearly double expectations.
Much of the spike came from a 230.8% surge in non-defense aircraft orders. Boeing reported 303 new aircraft deals in May, including 150 from Qatar Airways. That’s a dramatic leap from just eight aircraft orders in April, and the bulk of the activity traces back to deals announced during Trump’s diplomatic outreach to Gulf allies.
Transportation equipment orders overall surged 48.3%, including a modest 0.6% gain in motor vehicles and parts. Defense capital goods orders also rose 38.7%.
But the strength wasn’t limited to aviation. Core business investment also rebounded. Non-defense capital goods orders excluding aircraft, a key indicator of business equipment spending, rose 1.7% in May, the best showing since December. Shipments in this category, which feed directly into GDP calculations, also climbed 0.5%.
Orders across multiple sectors showed growth, including a 1.5% increase in computers and electronics, 0.8% in electrical equipment and appliances, and 0.3% in machinery. Overall durable goods shipments rose 0.2%.
Still, uncertainty remains. While aircraft and capital equipment are booming, businesses remain cautious due to ongoing import tariffs and the Biden administration’s unclear trade posture.
Economists note that Trump’s firm stance on trade, paired with targeted negotiations like those seen with Qatar, created more predictable conditions for U.S. manufacturers.
Federal Reserve Chair Jerome Powell told lawmakers this week that the central bank is watching for any inflation effects from tariffs before considering rate cuts. For now, interest rates remain in the 4.25%–4.50% range.
Despite early-year weakness—the economy contracted at a 0.5% annual rate in the first quarter—the Atlanta Fed now forecasts Q2 GDP growth at 3.4%, thanks largely to recovering imports and stronger investment.
May’s durable goods report signals a potential turning point for U.S. manufacturing, with Trump-era diplomacy and business confidence in high-value sectors helping to reverse earlier losses.