Economy
Durable Goods Orders Drop in July
Written by Sandy Williams
August 25, 2018
Durable goods orders fell more than expected in July, dipping 1.7 percent, according to data from the Commerce Department. The decrease was primarily due to a 34 percent plunge in commercial aircraft orders. Excluding transportation, durable goods orders were up 0.2 percent.
Core capital goods, orders minus defense and aircraft, gained 1.4 percent last month for the largest increase since April. Considered an indicator of business investment, core capital goods rose 7.2 percent in the first seven months of 2018 compared to the same period in 2017.
“The U.S. economy may have slowed a bit from the second quarter’s torrid pace, but growth is still strong. Steady business investment is likely to help prolong the expansion,” wrote MarketWatch. “The biggest problems facing manufacturers are higher costs for raw materials and a shortage of skilled workers to fill scores of job openings. The threat of the White House igniting a full-scale trade war and rising U.S. interest rates are also lurking in the background. So far, it hasn’t been a major issue.”
Shipments for primary metals rose 0.9 percent from June to July, while new orders increased 0.3 percent. Fabricated metal product shipments rose 0.5 percent, but new orders were unchanged from June.
The July advance report on manufacturers’ shipments, inventories and orders follows:
New Orders
New orders for manufactured durable goods in July decreased $4.3 billion or 1.7 percent to $246.9 billion, the U.S. Census Bureau announced. This decrease, down three of the last four months, followed a 0.7 percent June increase. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders decreased 1.0 percent. Transportation equipment, also down three of the last four months, drove the decrease by $4.6 billion or 5.3 percent to $82.8 billion.
Shipments
Shipments of manufactured durable goods in July, down following two consecutive monthly increases, decreased $0.5 billion or 0.2 percent to $250.8 billion. This followed a 1.6 percent June increase. Transportation equipment, down three of the last four months, drove the decrease by $1.6 billion or 1.9 percent to $83.9 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in July, up eight of the last nine months, increased $0.1 billion or were virtually unchanged at $1,164.7 billion. This followed a 0.3 percent June increase. Computers and electronic products, up five consecutive months, drove the increase by $0.3 billion or 0.3 percent to $115.3 billion.
Inventories
Inventories of manufactured durable goods in July, up 18 of the last 19 months, increased $5.0 billion or 1.3 percent to $408.3 billion. This followed a virtually unchanged June decrease. Transportation equipment, up three of the last four months, led the increase by $4.4 billion or 3.5 percent to $131.3 billion.
Capital Goods
Nondefense new orders for capital goods in July decreased $3.6 billion or 4.6 percent to $74.7 billion. Shipments decreased $3.3 billion or 4.2 percent to $74.9 billion. Unfilled orders decreased $0.2 billion or were virtually unchanged to $714.0 billion. Inventories increased $3.8 billion or 2.2 percent to $178.6 billion. Defense new orders for capital goods in July decreased $0.9 billion or 8.0 percent to $10.8 billion. Shipments decreased $0.1 billion or 0.7 percent to $11.4 billion. Unfilled orders decreased $0.5 billion or 0.4 percent to $147.0 billion. Inventories increased less than $0.1 billion or were virtually unchanged at $22.9 billion.
Revised June Data
Revised seasonally adjusted June figures for all manufacturing industries were: new orders, $501.4 billion (revised from $501.7 billion); shipments, $501.6 billion (revised from $501.4 billion); unfilled orders, $1,164.7 billion (revised from $1,165.2 billion) and total inventories, $669.6 billion (revised from $669.3 billion).
Sandy Williams
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