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Brian Wesbury
Chief Economist
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Bob Stein
Deputy Chief Economist
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 | New orders for durable goods declined 1.0% in June |
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Implications: Overall orders declined 1% in June but the details of the report show capital spending is stronger than the headline suggests. Orders for civilian aircraft, which are extremely volatile from month to month, fell 25.6%. Excluding that single category, orders were essentially unchanged for the month, with increases in orders for motor vehicles/parts, fabricated metals, and electronic equipment/appliances roughly offsetting declines in orders for primary metals, machinery, and computers/electronics. Notably, all of the declining categories in June are ones where orders are still up substantially in the past year, with primary metals up 40%, machinery up 19%, and computers/electronics up 11%. Meanwhile, shipments of "core" capital goods, which exclude defense and aircraft, increased 0.2% in June, the ninth increase in the last ten months. This is the number the government uses to estimate business investment in equipment. Gains in these shipments should continue; new orders for core capital goods increased 0.6% in June and unfilled orders increased 1.1%. In other recent news, the Richmond Fed index, a measure of manufacturing in the mid-Atlantic, came in at +16 in July. That's a decline versus +23 in June but was higher than the consensus anticipated and suggests continued healthy growth in the factory sector. The Case-Shiller index, a measure of home prices in the 20 largest metro areas, increased 0.5% in May and is up 4.6% in the past year.
Click here for the full report.
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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