New orders for manufactured durable goods in June decreased $2.0 billion or 1% to $190.5 billion, the U.S. Census Bureau reported. This was the second consecutive monthly decrease following a 0.8% drop in May and the largest drop since August.
The decline was broad-based, impacting many major industries, including machinery, primary metals and electronics.
Excluding transportation, new orders decreased 0.6%. Excluding defense, new orders decreased 0.7%. Transportation equipment, down four of the last five months, had the largest decrease -- $1.1 billion or 2.4% to $45.9 billion -- tied largely to a $1.8 billion drop in commercial aircraft and parts. Orders for commercial aircraft declined by a whopping 25.6 percent in June.
Orders for non-defense capital goods, those used in production, in June decreased $1.1 billion, or 1.6%, to $64.1 billion, while shipments increased $0.6 billion or 1% to $63.2 billion. Backlogs increased $0.9 billion or 0.2% to $486.6 billion.
Excluding aircraft, non-defense capital goods orders increased 0.6% following a 4.6% surge in May, more than previously reported.
"The acceleration in capital goods orders should help sustain growth in business investment," Aaron Smith, a senior economist at Moody's Economy.com in West Chester, PA, told Bloomberg News. "The fundamentals beneath this recovery appear good enough."
Click here to access the full report from the Commerce Department.
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