US durable goods orders up 3.4% in June

Economists had estimated that headline durable goods orders rose 3.2% in June month-over-month, and climbed 0.5% excluding transportation and defense orders, according to Bloomberg.

“We expect to see some modest bounce-back in durable goods orders for June”. Meanwhile, a key category that reflects business investment rebounded after two months of declines. The gain was the best result since March. This category had declined in April and May and had been weak for a number of months. That’s the highest gain since August 2014, but not an especially strong advance.

In a preview of the economic data this week, Wells Fargo’s John Silvia wrote: “New orders for durable goods have been tepid over the first half of the year as a strong dollar has weighed on exports and low oil prices have sapped demand for products related to energy investment”. Analysts blamed that weakness on a number of temporary factors including a harsh winter.

For June, demand for aircraft shot up 66.1 per cent, recovering from a 31.6 per cent plunge in May.

Excluding the increase in orders for transportation equipment, durable goods orders still rose by 0.8 percent in June compared to a 0.1 percent dip in May. Overall demand for transportation goods increased 8.9 percent.

Motor vehicle orders edged up 0.2%.

Non-defense new orders for capital goods grew 9.4 percent to $80.8 billion, while shipments fell 0.2 percent to $78.6 billion.

The report said increases in orders for electrical equipment, appliances, and components, fabricated metal products and machinery were partly offset by a decrease in orders for primary metals.