U.S. Durable Goods Orders Fall in July
Durable goods orders declined 1.7% last month, according to a report from the Commerce Department. That’s the third drop in the past four months, and was largely dragged lower by a 35.4% drop in orders for nondefense aircraft.
U.S. factory goods encompasses such items as automobiles and appliances and are generally expected to last at least three years. The sector had been a strong source of growth for most of 2018. Durable goods orders have risen 8.6% so far this year. July’s orders increased 1.4%, if aircraft and non-military goods aren’t counted, which bodes will for the economy. Business investment, consumer spending, surging exports and increased government outlays all contributed to the acceleration in economic growth overall in the second quarter.
Uncertainty surrounding trade war tariffs between the U.S. and key trade partners such as China, the European Union, Canada and Mexico has many manufacturers less assured about the future. That’s especially true for those that operate in global markets since they may be faced with higher prices and fewer sales.
Manufacturers were still expanding despite international trade becoming a dominant concern in the latest report from the Institute for Supply Management. In a survey of purchasing managers, the manufacturing index dropped in July to 58.1, from 60.2 in June. A ranking above 50 indicates growth.
Growth is still expected to remain healthy for the balance of 2018, as a result of tax cuts and increased government spending.
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