WASHINGTON ― New orders for long-lasting manufactured goods rose more than expected in July on strong demand for aircraft and motor vehicles, government data showed on Wednesday, but a gauge of business spending fell.
The Commerce Department said durable goods orders surged 4 percent after a revised 1.3 percent drop in June, which was previously reported as a 1.9 percent fall.
Economists polled by Reuters had expected orders to rise 2 percent last month. Orders were buoyed by a 14.6 percent jump in bookings for transportation equipment, which was the largest increase since January.Excluding transportation, orders unexpectedly rose 0.7 percent after gaining 0.6 percent in June. Economists had expected this category to fall 0.5 percent.
But non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, fell 1.5 percent last month after a revised 0.6 percent rise in June.
Economists had expected a 1 percent fall from a previously reported 0.4 percent gain.
The decline in business spending plans, coming on the heels of weak readings on regional factory activity so far this month, could add to fears that the manufacturing sector is running out of steam.
However, this business spending plans category normally weakens in the first month of each quarter in part because of an incomplete seasonal adjustment of the power equipment subcomponent.
Manufacturing has supported the economy’s recovery. However, a plunge in share prices has hit both business and consumer confidence. Regional Federal Reserve factory surveys so far for August have been sharply weaker.
Last month, durable goods orders were buoyed by a 43.4 percent surge in aircraft orders, which erased June’s 24 percent slump. Boeing received 115 aircraft orders, up from 48 in June, according to information posted on the plane maker’s website.Motor vehicle orders jumped 11.5 percent, the largest increase since January 2003, after edging up 0.1 percent the previous month, indicating a fading of the supply chain disruptions from Japan.
Outside of transportation, details of the report were mixed, with orders for machinery and computers and electronic products falling. However, orders for primary metals, and capital goods rose.
Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, edged up 0.2 percent after rising 1.9 percent in June.