Orders for U.S.-manufactured durable goods (items meant to last at least three years) rose in June by $2.5 billion (1.0 percent) to $251.9 billion, according to new data from the Census Bureau. That was the first monthly increase since March but a smaller gain than economists anticipated, and the May figure was revised lower. More importantly, “core” durable goods orders, which exclude the volatile transportation component, lifted by 0.4 percent in June.
That was in line with expectations and May’s 0.3 percent decline was revised sharply higher to a 0.3 percent gain. Similarly, orders for nondefense capital goods excluding aircraft, i.e. core capital expenditures, an important proxy for U.S. business investment, increased by 0.6 percent in June and the May figure was again revised much higher. Altogether this was a solid report on U.S. factory activity which bodes well for gross domestic product (GDP) growth in America. Moreover, the latest projection from the Federal Reserve Bank of Atlanta suggests that the economy expanded by 3.8 percent in Q2 2018, a welcome rebound from 2.0 percent in the first quarter.
Sources: Econoday, U.S. Census Bureau, FRBA, FRBSL
Post author: Charles Couch