Durable Goods Orders Disappoint

The string of happy news ended today with the government’s release of new orders for durable goods.

Orders for June declined 2.5% from May. The growth rate for May was reduced to 1.3% from the previously reported 1.8%. The drop in the June numbers was the largest in five months but it was driven mostly by a large decline in new orders for transportation equipment. Taking that out of the equation, new orders were up 1.1%.

If you compare June results with June 2008, you get a better sense of the depth of decline in manufacturing. New orders are 26.7% below June of last year.

From Jake at EconomPicData.com, here is a graphic representation of June’s results.

Most reports I’ve seen aren’t making too much of a big deal out of this. The durable goods number is volatile from month-to-month so it isn’t unreasonable to say that one month of bad news isn’t a sign that we’re headed back down the road to perdition. By the same token, it’s going to feel a whole lot better if and when we get into a cycle that turns in positive numbers routinely.

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