New orders for key U.S.-made capital goods unexpectedly fell in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.
The Commerce Department said on Monday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 0.2 percent, the largest decline since December.
These so-called core capital goods orders were revised up to show an increase of 0.2 percent for April. They were previously reported to have risen 0.1 percent.
Shipments of core capital goods fell 0.2 percent last month after rising 0.1 percent in April. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
Economists polled by Reuters had forecast core capital goods orders rising 0.3 percent in May.
"We see the core data as consistent with soft business investment in the second quarter" said Blerina Uruci, an economist with Barclays.