U.S. Durable Goods Orders Paused in July
Summary
- Manufacturers' new orders for durable goods take a breather.
- New orders for nondefense capital goods excluding aircraft continue to improve.
- Order backlogs & inventories post small gains.
Manufacturers' new orders for durable goods were little changed in July, declining by 0.02% (10.8% y/y), following a healthy 2.2% rise in June. The Action Economics Forecast Survey expected a 0.9% rise.
New orders for nondefense capital goods excluding aircraft, a key measure of capital goods spending, rose 0.4% (8.5% y/y) in July after a 0.9% rise in June.
Transportation equipment orders declined 0.7% (18.9% y/y) following the 6.1% surge in June. Motor vehicles & parts orders rose 0.2% (11.4% y/y) in July after a 1.7% rise in June. The volatile defense aircraft orders plummeted 49.8% (1.6% y/y) after a 78.1% monthly surge in June.
Excluding transportation, orders rose 0.3% (7.1% y/y) in July, following the same 0.3% monthly rise in June. Electrical equipment & appliance orders declined 0.4% (9.5% y/y) after the June rebound of 2.9%. Computers & electronics product orders rose 0.5% (6.9% y/y) on the back of a 1.6% rise in June. Fabricated metals orders rose 1.2% (9.2% y/y) after a 0.2% rise in June, but primary metals orders dropped 1.4% (4.9% y/y), the same monthly drop than in June. Orders for machinery rose 0.4% (7.1% y/y) in July, close to the 0.5% rise in June.
Shipments of durable goods posted a 0.4% (9.5% y/y) rise in July, close to the 0.3% gain in June. Transportation shipments rose 1.1% (11.1% y/y) last month after a 0.2% rise in June. Excluding transportation, shipments were little changed (8.8% y/y), following the 0.3% gain in June.
The advance reading on shipments of nondurable goods indicated a monthly drop of 1.7% (14.5% y/y) in July after a 1.4% rise in June. Shipments from all manufacturing industries declined 0.7% (12.0% y/y), almost erasing the June gain of 0.8%. But capital goods shipments excluding defense and aircraft rose 0.7% (11.2% y/y) in July after a 0.8% rise in June.
Unfilled orders for durable goods gained 0.7% (7.3% y/y) last month, on the back of a 0.8% rise in June. Unfilled orders are not calculated for nondurable goods.
Durable goods inventories edged up 0.2% (8.8% y/y) in July after the 0.4% rise in the prior month. Nondurable goods inventories dropped 0.2% (11.6% y/y) after the 0.4% rise in June.
The durable goods and nondurable goods data are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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