US durable goods orders plummet in June as those for aircraft dive

25th Jul 2024 14:54

(Sharecast News) - Orders for goods made to last more than three years cratered last month, due to a steep downdraft in those for commercial aircraft.

But the details of the report were considerably stronger.

According to the US Department of Commerce, in seasonally adjusted terms, durable goods orders shrank by 6.6% month-on-month to reach $264,541 and by 2.0% year-on-year.

That was far weaker than the 0.3% gain anticipated by economists.

Excluding transportation on the other hand, durable goods orders were up by 0.5%.

Orders for civilian aircraft cratered by 127.2% to reach -$4.23bn.

Defence aircraft orders did not fare much better, sliding by 10% to $4.56bn.

Yet orders for capital goods excluding aircraft and defence, a key leading indicator for investment, jumped by 1.0% to $73.99bn.

"Real equipment spending surged by 11.6% annualized in Q2. While we don't expect this growth rate to be duplicated in the near term, the forecast still calls for further strength over the rest of the year and into the next as the Federal Reserve starts cutting interest rates in September," said Bernard Yaros, US lead economist at Oxford Economics.

"Industrial policies and capital spending on artificial intelligence will lend additional support."