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New orders for manufactured durable goods in June decreased $4.1 billion or 2.5% to $158.6 billion, according to the U.S. Census Bureau. This decrease followed two consecutive monthly increases including a 1.3% May increase. Excluding transportation, new orders increased 1.1%. Excluding defense, new orders decreased 0.7%.
Shipments of manufactured durable goods in June, down eleven consecutive months, decreased $0.3 billion or 0.2% to $168.3 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 2.6% May decrease.
Unfilled orders for manufactured durable goods in June, down nine consecutive months, decreased $6.6 billion or 0.9% to $740.1 billion. This followed a 0.3% May decrease.
Inventories of manufactured durable goods in June, down six consecutive months, decreased $3.0 billion or 0.9% to $318.8 billion. This followed a 1.1% May decrease.
Donald A. Norman, economist for the Manufacturers Alliance/MAPI, provided analysis of the latest numbers:
"At first glance, the 2.5% decline in new orders for durable goods suggests continued weakness in the manufacturing sector. A closer look at the data, however, reveals that the manufacturing sector has turned the corner and that production will rise going forward.The underlying data provide yet another sign that the economy has bottomed out and is starting on the road to recovery. Most of the weakness was in transportation equipment where new orders were down 12.8%.If transportation equipment orders are netted out, durable goods orders were up 1.1% in June compared to 0.8% in May.
"As auto manufacturers ramp up production this summer, transportation equipment activity should improve. Further, this is the sixth straight month inventories of durable goods declined.This means that manufacturers will have to increase production to accommodate demand as it picks up."
Nondefense new orders for capital goods in June decreased $1.8 billion or 3.4% to $51.3 billion.
Defense new orders for capital goods in June decreased $3.4 billion or 28.3% to $8.6 billion.