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Economy in Brief

U.S. Durable Goods Orders Strengthen Unexpectedly During June
by Tom Moeller  July 27, 2022

• Nondefense capital goods orders excluding aircraft improve steadily.

• Transportation equipment orders surge.

• Order backlogs & inventories increase.

Manufacturers' new orders for durable goods continued to exhibit surprising improvement in June. A 1.9% rise (10.9% y/y) followed a 0.8% May gain, revised from 0.7%. The increase contrasted with expectations for a 0.3% decline in the Action Economics Forecast Survey.

New orders for nondefense capital goods excluding aircraft, a key measure of capital goods spending, rose 0.5% (8.4% y/y), the same as during May which was unrevised.

Transportation equipment orders surged 5.1% (18.9% y/y) after a 1.5% May increase. Motor vehicle & parts orders increased 1.5% (19.0% y/y) after a 1.2% improvement. Defense aircraft orders jumped 80.6% (122.3% y/y) after rising 9.8% in May.

Excluding transportation, orders rose 0.3% (7.2% y/y) in June following a 0.5% May improvement. Electrical equipment & appliance orders rebounded 2.5% (7.5% y/y) after falling 0.6% in May. Computer & electronic product orders improved 1.5% (5.9% y/y) after rising 0.2% in May. Fabricated metals orders rose 0.3% (6.2% y/y) after easing 0.2%, but primary metals bookings fell 1.1% (+10.8% y/y) after a 2.0% gain. Orders for machinery eased 0.2% (9.1% y/y) following a 1.3% increase.

Shipments of durable goods edged 0.3% higher (12.2% y/y) after a 1.5% May improvement. Transportation shipments were little changed (16.4% y/y) following a 2.5% rise. Excluding transportation, shipments improved 0.4% (10.4% y/y) during June after rising 1.1% in May.

The advance reading on shipments of nondurable goods indicated a 2.0% June gain (17.4% y/y) following a 2.7% rise. Shipments from all manufacturing industries rose 1.1% (14.8% y/y) in June after a 2.1% May improvement. Capital goods shipments excluding defense and aircraft increased 0.7% (11.4% y/y) in June after rising 1.0% in May.

Unfilled orders for durable goods rose 0.7% last month (7.0% y/y) following a 0.3% May rise. Unfilled orders are not calculated for nondurable goods.

Durable goods inventories increased 0.4% (9.1% y/y) following a 0.6% May gain. Nondurable goods inventories rose 0.4% in June (12.5% y/y) after a 2.4% May increase.

The durable goods and nondurable goods data are available in Haver's USECON database. The Action Economics consensus forecast figure is in the AS1REPNA database.

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