Mixed picture in June durable goods orders report
BY SHAHZAD CHAUDHARY–MEDILL NEWS SERVICE
New orders for durable goods, products meant to last several years, fell by 2.5 percent to $158.6 billion in June, according to a report released Wednesday by the U.S. Department of Commerce. Shipments fell for the eleventh straight month in June by 0.2 percent to $168.3 billion.
Excluding transportation, durable goods orders actually rose by 1.1 percent to $122 billion in June. Orders for machinery increased for a third straight month in June, rising 4.4 percent to $23.3 billion.
Orders for defense capital goods last month plummeted 28.3 percent from May to $8.6 billion, which might seem odd when the country is in the midst of three wars (Iraq, Afghanistan and Pakistan). But these orders, like those for transportation equipment, have massive swings up and down from month to month.
That may be why most economists focus on non-defense orders excluding aircraft to try to get a better idea how business capital spending is faring. In June, that figure rose 1.4 percent for its second consecutive monthly gain.
Still, orders and shipments of defense goods may be destined to go down in the future once the 2010 defense budget is approved. The bill, which is still being debated in Congress, will likely strip out costly items like the F-22 ($187 million) and the development of the alternate engine for F-35 ($560 million).
Tags: defense, durable goods, economy, Manufacturing
