Washington, DC, August 24, 2006--New orders for durable goods fell 2.4% in July on a big decline in orders for transportation goods, the Commerce Department said Thursday.
Excluding the 9.6% drop in transportation goods, durable goods orders rose 0.5%, the 10th increase in the past 12 months.
Economists forcast a drop of only 0.7% in durable goods orders during the month. June's orders were revised higher by 0.6 percentage points to 3.5% to offset some of the short-fall.
Durable-goods orders are up 9.3% year-to-date.
Transportation orders had soared in recent months on hefty increases for civilian aircraft. Orders returned to normal in July.
Orders for civilian aircraft fell 10%. Orders for motor vehicles dropped 7%, the biggest decline in two years. Orders for motor vehicles are up 1.1% year-to-date.
Orders for defense aircraft remained robust, rising 9% in July.
Shipments of durable goods fell 1.3% in July after a 0.3% rise in June. Shipments of transportation goods fell 6.4%.
Inventories of durable goods rose 1% in July. Unfilled orders increased 1.4% and are up 20.2% year-to-date, a sign that production should remain strong for months to come.
Sectors outside of transportation were strong in July. Orders for nondefense nonaircraft capital goods rose 1.5% after a 1.4% rise in June. These goods represent the equipment businesses invest in to maintain and increase capacity.
Shipments of capital equipment rose 1.3%, a sign that business investment should grow in the third quarter after a surprising decline in the second quarter.
Orders for computers and electronics (excluding semiconductors) rose 4.6% in July after a 6.7% rise in June. Shipments, which include chips, rose 1.3%.
Orders for machinery increased 1.9% in July. Shipments rose 1%. Orders for electrical equipment fell 0.7% in July, while shipments rose 0.8%. Orders for fabricated metals dropped 6.2% in July, reversing June's 5.7% gain. Shipments fell 0.7%. Orders for primary metals increased 1.2%. Shipments rose 1.8%.
