U.S. Durable Goods Orders Spike 11.2% In July, Much More Than Expected
Reflecting a sharp increase in orders for transportation equipment, the Commerce Department released a report on Wednesday showing new orders for U.S. manufactured durable goods spiked by much more than expected in the month of July.
The Commerce Department said durable goods orders skyrocketed by 11.2 percent in July after surging up by a revised 7.7 percent in June.
Economists had expected durable goods orders to increase by 4.3 percent compared to the 7.6 percent jump that had been reported for the previous month.
The much bigger than expected increase in durable goods orders came as orders for transportation equipment ballooned by 35.6 percent in July after shooting up by 19.7 percent in June.
A 21.9 percent jump in orders for motor vehicles and parts contributed to the spike along with fewer net aircraft cancellations at Boeing (BA).
Excluding the substantial increase in orders for transportation equipment, durable goods orders rose by a much more modest 2.4 percent in July after climbing by 4.0 percent in June. The increase still exceeded estimates for 2.0 percent growth.
Orders for computers and electronic products, machinery and fabricated metal products all showed notable increases during the month.
The report also said orders for non-defense capital goods excluding aircraft, a reading on business spending, climbed by 1.9 percent in July after surging up by 4.3 percent in June.
Shipments in the same category, which is the source data for equipment investment in GDP, jumped by 2.4 percent in July after soaring by 3.8 percent in the previous month.
“With core orders now back close to pre-pandemic levels, the recovery in business equipment investment looks pretty V-shaped to us,” said Michael Pearce, Senior U.S. Economist at Capital Economics.
Next Wednesday, the Commerce Department is scheduled to release its monthly report on factory orders, which include orders for both durable and non-durable goods.
The material has been provided by InstaForex Company – www.instaforex.com