Orders for U.S.-made durable goods unexpectedly jumped in May, adding to signs the economic slump is easing. The 1.8 percent gain in bookings for goods meant to last several years matched the previous month's increase, the Commerce Department said today in Washington. Economists projected orders would drop 0.9 percent, according to the median of 75 forecasts in a Bloomberg News survey. The economy is projected to return to growth in the second half of the year, and sustained gains in consumer spending may encourage businesses to boost investment and production after having slashed inventories earlier this year. Still, rising unemployment and tight credit will temper the recovery. ``New orders are beginning to stabilize,'' Michael Moran, chief economist at Daiwa Securities America Inc. in New York, said before the report. ``The economy seems to be on course for a gradual turn.'' The range of estimates of economists surveyed ran from a decline of 3.9 percent to a gain of 1 percent. Commerce revised the April gain from a previously reported 1.9 percent increase. Excluding transportation equipment, orders climbed 1.1 percent after a 0.4 percent rise. Demand for commercial aircraft, which is often volatile, surged 68 percent in May after declining 1.4 percent the prior month. The jump propelled orders for transportation equipment up 3.6 percent, even as auto bookings slumped. Aircraft Boeing Co., the world's second-largest commercial-jet builder, received 20 orders in May, up from 17 a month earlier. Chicago-based Boeing said it is sticking to its 2009 delivery projections even as cancellations have almost outweighed new orders this year and carriers have deferred dozens of planes. Automobile orders dropped 8.1 percent after a 1.2 percent increase the prior month, today's report showed. Auto shutdowns linked to the bankruptcies of Chrysler LLC and General Motors Corp. may depress factory orders in the near term. Chrysler this month said that it resumed production at a Detroit plant, after idling all its factories on May 1 while it reorganized. GM said it'll extend downtime at units in Texas and Kentucky while adding a shift at a Michigan facility. Orders excluding defense equipment increased 1.4 percent and bookings for military gear gained 7.4 percent. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, jumped 4.8 percent, the most since September 2004. Shipments of those items, used in calculating gross domestic product, rose 0.3 percent after dropping 2.7 percent. Computers, Machinery Orders for computers and related products jumped 9.4 percent. Machinery demand gained 7.7 percent, the most in more than a year. General Electric Co., hose businesses span power-plant turbines, jet engines and private-label credit cards, is among the companies not seeing a marked improvement in demand yet. ``I am not particularly of the green shoots group yet,'' GE Vice Chairman John Rice said this month in Atlanta, referring to a phrase used by Fed Chairman Ben S. Bernanke that described signs of a nascent recovery. ``I have not seen it in our order patterns yet.''

Source