Source: Economics Group of Wells Fargo Bank, N.A.
Summary
New orders of durable goods surged 9.9% in July, coming on the heels of a 6.9% contraction the prior month. The month-to-month volatility has been driven primarily by aircraft. Excluding transportation goods, orders slipped 0.2% in July. Today’s data confirm the ongoing trend that manufacturers are largely standing idle until looser policy comes to fruition and supports broad-based capital expenditures.
Flying High?
New orders of durable goods surged 9.9% in July, coming on the heels of a 6.9% contraction the prior month. The month-to-month volatility has been driven primarily by aircraft. Separately released data from Boeing showed aircraft orders picking up in July after some weakness in May and June, which corroborates the recent swings in headline durable good orders. Excluding transportation goods, orders slipped 0.2% in July.
Softness was broad-based. Orders of motor vehicles & parts (-2.6%) posted the largest monthly decline, followed by communication equipment (-1.1%) and primary metals (-0.9%). The decrease in new orders of autos and parts reflects the ongoing normalization in the sector that has been faced with numerous supply challenges since the pandemic. On the flip side, computers and related products continue to be a bright spot in the otherwise dreary landscape—new orders of computers rose 3.2% in July and are up nearly 13% over the year.