Fewer contracts for Boeing jets, military hardware drive decline
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Orders for big-ticket U.S. goods sank 7.3% in July, mostly because of fewer contracts for jetliners and large military goods, the government said Monday.
The decline in orders for durable goods — the first in four months — was somewhat expected after a steady increase in demand since spring. Yet the July report shows little change in the overall trajectory of a slowly growing U.S. manufacturing sector.
Economists surveyed by MarketWatch had expected orders to drop a seasonally adjusted 4.9% in July, mainly because of a sharp decline in orders for Boeing commercial jets. Aircraft orders plunged 52.3% after runups of 33.8% in June and 67.6% in May.
Boeing said it signed 90 contracts in July, down from 287 in the prior month. Orders for expensive aircraft can swing sharply from month to month and skew the durables report.
Orders for cars and trucks, however, rose 0.5% as demand for autos remained strong.
Stripping out the volatile transportation sector, orders fell a much smaller 0.6%, the Commerce Department said.
Makers of computers, electronics, electrical equipment and appliances saw orders decline in the 3% to 4% range. Orders were soft for other major industrial sectors as well.
Orders for core capital goods, a key barometer of private-sector business investment, dropped 3.3% to mark the first decline in five months.
Shipments of core capital goods, a category used to calculate quarterly economic growth, declined 1.5% in July.
Orders for June, meanwhile, were unchanged at a 3.9% increase.
The durables report is extremely volatile and subject to large revisions, so economists look at longer trends. In 2013, orders for durable goods have risen a modest 3.3% in the first seven months of the year compared to the same period one year earlier.
Core orders are up 3.8% in the same span.
Jeffry Bartash is a reporter for MarketWatch in Washington.
