New orders for durable goods fall 4.9%

WASHINGTON – Manufacturers’ orders for durable goods fell a seasonally adjusted $11.3 billion or 4.9 percent last month to $219.5 billion, after rising a revised 6.1 percent in July and 1.9 percent in June, according to the advance report released today by the U.S. Census Bureau’s Manufacturing and Construction Division.
The drop – the sharpest in seven months – was bigger than anticipated, according to Bloomberg News, whose survey of 74 economists forecast a decline of 4.0 percent. (Predictions ranged from an increase of 1 percent to a decrease of 7.9 percent.)
The decline was led by a 41 percent drop in commercial aircraft orders and a 6.2 percent drop in automobiles. Orders excluding airplanes and other transportation equipment fell 1.8 percent. Excluding defense, new orders fell 5.9 percent.
Among capital goods, non-defense new orders plunged $10.2 billion or 12.6 percent to $70.9 billion, after rising 2.2 percent in July.
“Things are starting to cool a bit for business spending,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, told Bloomberg News. “Part of it is the uncertainty over demand going forward, and part of it is that costs of borrowing have gone up.”
Additional information, including the Advance Report on Manufacturers’ Shipments, Inventories and Orders (M3), is available from the U.S. Commerce Department’s Bureau of the Census, Manufacturing and Construction Division, at www.census.gov/m3.