U.S. Durable Goods Orders Unexpectedly Drop in June
Summary
- A sharp 6.6% m/m fall in June following four straight m/m rises.
- Nondefense aircraft orders plummet 127.2% m/m.
- Transportation orders plunge 20.5% m/m; excluding transportation, orders rise 0.5% m/m.
- Core capital goods shipments up only 0.1% m/m vs. a 0.7% May decline.
- Durable goods shipments up, unfilled orders down, and inventories unchanged.
New orders for durable goods unexpectedly fell 6.6% m/m (-10.3% y/y) in June after unrevised increases of 0.1% in May and 0.2% in April, according to the U.S. Census Bureau. The Action Economics Forecast Survey had expected a 0.6% m/m June rise. The June reading was the first m/m fall since January and the deepest since April 2020. Durable goods orders excluding the transportation sector grew 0.5% (1.2% y/y), the second m/m gain in three months, after a 0.1% May downtick. Durable goods orders excluding defense fell 7.0% (-11.3% y/y) in June after holding steady in May.
The sharp m/m fall in June durable goods orders was led by a 127.2% m/m plummet in orders for nondefense aircraft & parts following a 2.0% rebound in May. Orders for defense aircraft & parts fell 10.0% m/m after a 14.6% May gain. Orders excluding aircraft, however, rose 0.7% in June, the fifth m/m rise in six months, following a 0.2% decline in May.
Durable goods orders for transportation generally plunged 20.5% (-30.1% y/y) in June, the second m/m decline in three months and the deepest since April 2020, following a 0.6% increase in May. Orders for motor vehicles & parts dipped 0.1% (+3.6% y/y) in June after holding steady in May and six straight m/m rises. Orders for primary metals edged down 0.1% (-0.8% y/y) following a 0.3% May decline and three consecutive m/m increases. To the upside, the following durable goods orders rose m/m in June: machinery (1.6%; 1.8% y/y), electrical equipment, appliances & components (1.3%; 0.7% y/y), computers & electronic products (0.8%; 2.4% y/y), and fabricated metal products (0.2%; 2.3% y/y). Meanwhile, orders for all other durable goods were virtually unchanged (+0.6% y/y) in June after a 0.1% downtick in May and April.
Capital goods orders dropped 18.4% (-29.1% y/y) in June after holding steading in May. Nondefense capital goods orders slid 22.4% (-34.6% y/y), the third straight m/m slide and the deepest since March 2020, after a 0.4% May decline. Core capital goods orders (i.e., nondefense capital goods orders excluding aircraft) rebounded 1.0% (0.3% y/y), up for the second month in three, after a 0.9% May decrease. Defense capital goods orders rose 6.1% (13.3% y/y) on top of a 2.1% May increase and a 14.3% April jump. Notably, core capital goods shipments (core capex shipments), a reliable coincident indicator of business spending on equipment in the national accounts, increased a marginal 0.1% (-0.2% y/y) in June following a 0.7% drop in May and a 0.3% rebound in April.
Shipments of all manufactured goods rose 0.6% (2.6% y/y) in June, the fourth m/m rise in five months, after a 0.7% decrease in May. Durable goods shipments increased 1.2% (1.9% y/y), up for the fourth month in five, after a 0.4% May decline. Nondurable goods shipments slipped 0.1% (+3.3% y/y) following a 1.0% May drop and three straight m/m increases.
Unfilled orders of durable goods fell 1.3% (+4.7% y/y) in June, the first m/m fall since July 2020, reversing a 0.2% increase in May. Excluding transportation, unfilled orders ticked up 0.1% (-0.6% y/y) in June after no change in May and a string of declines during the January to April period.
Manufacturing inventories were essentially unchanged (+0.9% y/y) in June after increasing 0.1% in May and April. Durable goods inventories held steady (+1.3% y/y) after a 0.2% May rise. Nondurable goods inventories were virtually unchanged (0.3% y/y) in June following a string of modest increases from February to May.
Manufacturers’ orders and shipments of durable and nondurable goods, along with unfilled orders and inventories, are compiled by the U.S. Census Bureau. They are available in Haver’s USECON database. The Action Economics forecast data are in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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