MW: Durable-goods orders rise for first time in three months
Demand for airplanes strong, broad weakness elsewhere
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- Stronger demand for airplanes translated only into a 0.3% increase in durable-goods orders in July as there was broad weakness in other categories, the Commerce Department estimated Wednesday.
This was the first increase in durable-goods orders in three months but was much less than expected.
Economists surveyed by MarketWatch had been forecasting a 2.7% increase, banking on strength in the aircraft sector, as Boeing Co. (BA 60.63, -0.30, -0.49%) has reported a strong gain in orders this summer. See calendar of upcoming U.S. indicators.
Excluding a 13.1% rise for transportation equipment, durable orders fell 3.8% in July, the biggest drop since January 2009.
The monthly durables report is highly volatile, in large part because of swings in demand for civilian aircraft and other extremely expensive items.
Offsetting some of the weakness in July, the government reported that orders in June fell an upwardly revised 0.1%, much less than the prior estimate of a 1.2% drop.
Shipments of durable goods rose 2.2% in July and were up 0.6% excluding transportation. Read the full government report.
Inventories of durable goods rose 0.6% in July.
Economists see signs that the surge in manufacturing is starting to wane as companies attempt to control inventories in light of the sluggish economy.
For instance, the Philadelphia Federal Reserve reported its manufacturing survey fell sharply into negative territory in August. See full story.
The Institute for Supply Management's factory index has slipped for three consecutive months after hitting 60.4 in April. See details of key ISM factory index.
Details
Orders for nondefense capital equipment goods excluding aircraft fell 8% in July, reversing a 3.6% increase in June. Such core capital goods orders are considered the best gauge of capital spending by businesses.
Shipments of core capital goods -- a figure that feeds directly into calculations of gross domestic product - fell 1.5% in July.
Orders for electronics, excluding semiconductors, fell 2.4% in July.
Orders for fabricated metals fell 1.0%. Orders for primary metals rose 0.7%.
Orders for electrical equipment fell 5.9%.
Orders for defense capital goods fell 2.2%. Excluding defense, orders rose 0.3%.
Computer and related product orders fell 12.7% in July.
