Durable Goods Orders Fall 4.0% in June; Ex-Transportation Off 0.5%

WASHINGTON – The value of durable goods new orders fell by 4.0% in June, a larger-than-expected that decline that can be mostly attributed to a plunge in aircraft orders, data released by the Commerce Department Wednesday indicated.

Analysts had expected a 1.7% decline in total new orders, even allowing for a decline in orders for aircraft after Boeing announced a sharp drop off this month. However, the 58.8% decline in nondefense aircraft orders and a 7.4% decline in defense aircraft orders were fairly outsized.

While motor vehicles orders provided some offset with a 2.6% gain, total transportation orders declined 10.5% in the month, the largest decline since August 2014.

Meanwhile, new orders excluding transportation declined 0.5% in June after a 0.4% decline in the May, a rough ending to the second quarter after gains in March and April. There were widespread declines in the non-transportation categories, with only a 0.8% gain in electrical equipment orders providing some offset.

Nondefense capital goods new orders were down 11.3%, but were actually up 0.2% excluding civilian aircraft, one positive in the otherwise weak report.

Durable goods shipments rose 0.4% in June, with nondefense capital goods shipments down 1.3%, and down 0.4% excluding civilian aircraft shipments.

This month's data combined with revisions to May put the second quarter average for nondefense capital goods shipments 0.4% ahead of the first quarter average, while the second quarter average was actually down 0.4% from the first quarter average excluding civilian aircraft shipments, a net negative for the advance GDP report scheduled for release Friday.

Durables inventories fell 0.2% and unfilled orders were down 0.9% in June.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.
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