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Economy in Brief

U.S. Durable Goods Orders Paused in July
by Kathleen Stephansen, CBE  August 24, 2022

• Manufacturers' new orders for durable goods take a breather.

• New orders for nondefense capital goods excluding aircraft continue to improve.

• Order backlogs & inventories post small gains.

Manufacturers' new orders for durable goods were little changed in July, declining by 0.02% (10.8% y/y), following a healthy 2.2% rise in June. The Action Economics Forecast Survey expected a 0.9% rise.

New orders for nondefense capital goods excluding aircraft, a key measure of capital goods spending, rose 0.4% (8.5% y/y) in July after a 0.9% rise in June.

Transportation equipment orders declined 0.7% (18.9% y/y) following the 6.1% surge in June. Motor vehicles & parts orders rose 0.2% (11.4% y/y) in July after a 1.7% rise in June. The volatile defense aircraft orders plummeted 49.8% (1.6% y/y) after a 78.1% monthly surge in June.

Excluding transportation, orders rose 0.3% (7.1% y/y) in July, following the same 0.3% monthly rise in June. Electrical equipment & appliance orders declined 0.4% (9.5% y/y) after the June rebound of 2.9%. Computers & electronics product orders rose 0.5% (6.9% y/y) on the back of a 1.6% rise in June. Fabricated metals orders rose 1.2% (9.2% y/y) after a 0.2% rise in June, but primary metals orders dropped 1.4% (4.9% y/y), the same monthly drop than in June. Orders for machinery rose 0.4% (7.1% y/y) in July, close to the 0.5% rise in June.

Shipments of durable goods posted a 0.4% (9.5% y/y) rise in July, close to the 0.3% gain in June. Transportation shipments rose 1.1% (11.1% y/y) last month after a 0.2% rise in June. Excluding transportation, shipments were little changed (8.8% y/y), following the 0.3% gain in June.

The advance reading on shipments of nondurable goods indicated a monthly drop of 1.7% (14.5% y/y) in July after a 1.4% rise in June. Shipments from all manufacturing industries declined 0.7% (12.0% y/y), almost erasing the June gain of 0.8%. But capital goods shipments excluding defense and aircraft rose 0.7% (11.2% y/y) in July after a 0.8% rise in June.

Unfilled orders for durable goods gained 0.7% (7.3% y/y) last month, on the back of a 0.8% rise in June. Unfilled orders are not calculated for nondurable goods.

Durable goods inventories edged up 0.2% (8.8% y/y) in July after the 0.4% rise in the prior month. Nondurable goods inventories dropped 0.2% (11.6% y/y) after the 0.4% rise in June.

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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