New orders for big-ticket durable goods fell in July by the most in nearly three years, as orders and shipments for core-capital goods surged, according to a new report, while a separate one showed the market for existing home sales declined following a drop in new home sales.
The 6.8% drop in orders for new durable goods was largely due to drop in the volatile aircraft sector and follows a revised 6.4% improvement in June, according to the Commerce Department. Many analysts were anticipating a slightly larger decline.
Excluding transportation orders, new orders for durable goods increased 0.5% in July, marking three consecutive monthly improvements.
Shipments of durable goods increased 0.4% in July from the month before, the third straight monthly gain.
The closely watched orders for nondefense capital goods minus aircraft, an indicator of business investment, increased 0.4% in July, slightly better than Wall Street expectations, and is up from being nearly unchanged in June. Compared to July 2016, orders for these goods are up 3.3%.
Shipments of core capital goods jumped 1% in July following an upwardly revised to a 0.6% increase in June following an originally reported 0.1% gain. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.
The gain in durable goods shipments translates into a “special plus and one that will lift gross domestic product,” once the third quarter is over and numbers are released, according to analysts at Econoday.
“Positives are definitely the theme of today's report, one that helps offset last week's unexpected decline in manufacturing production and supports the enormous strength being signaled by advance regional reports,” they said. “The economy may very well get a solid second-half boost from what has been an improving factory sector.”
Existing Home Sales Drop Following New Home DeclineOn the other hand, sales of existing
