US Manufactured Goods Orders Dip In July

Spending on big-ticket US manufactured goods dipped slightly in July, but was held up by a surge in demand from the defense sector, according to government data released Wednesday.

After two months of increases, durable goods orders slipped 0.1 percent compared to June to $257.2 billion, the Commerce Department reported, a smaller decline than analysts were projecting.

Orders from the military prevented a much bigger drop in the total, with a 20.5 percent increase in defense capital goods orders and a smaller rise in aircraft.

Without the defense sector, total new orders fell 1.2 percent, the report said.

Meanwhile, the transportation sector retreated as nondefense aircraft orders plunged, though spending on motor vehicles and parts rose.

Ian Shepherdson of Pantheon Macroeconomics noted that the data "were hit by a sharp drop in net orders for Boeing aircraft -- which are trending higher but are wildly volatile."

But, he said, "Businesses are sitting on record cash piles, so we expect capital goods orders to run hot for some time yet."

Excluding aircraft and other transportation, which tend to swing wildly, orders actually increased 0.7 percent -- far more than the consensus forecast.

"Supply side headwinds are showing some tentative signs of easing, but it'll take a long time to return to pre-Covid conditions," said Oren Klachkin of Oxford Economics.