It's another sign that, perhaps, the American economy is not quite out of the woods yet.
Figures released this morning by the U.S. Census Bureau showed that new orders for durable goods dropped a larger-than-expected 7.3% in July to retrace partially outsized gains of 3.9%, 5.5%, and 3.6% over the period June through April, respectively.
Much of the headline weakness in July resulted from a 52.3% plunge in orders of non-defense aircraft that was consistent with an earlier reported sharp falloff in orders from Boeing in the month.
With that said, excluding the transportation component, sales were still down 0.6% (below market expectations for a 0.5% gain). As well, orders of non-defense capital goods excluding aircraft, a commonly used leading indicator for business capital spending, plunged 3.3% to retrace more-than-half of a 5.9% gain over the previous four months combined.
The corresponding shipments measure, which enters directly into the U.S. Bureau of Economic Analysis’ estimate of current quarter business investment, declined as well, although by a more modest 1.5% to build on a 0.8% decline in June. Overall shipments inched down 0.3% while inventories of durable factory goods rose 0.4% following a 0.2% increase in June and a 0.1% dip in May.
