Orders for long-lasting U.S. factory goods plunge
WASHINGTON – Orders for long-lasting U.S. factory goods fell sharply last month as demand for commercial aircraft plummeted and businesses spent less on computers and electrical equipment.
Manufacturing continues to struggle and could prevent economic growth from picking up in the July-September quarter.
Orders for durable goods plunged 7.3 percent in July, the Commerce Department said Monday. It’s the steepest drop in nearly a year. Excluding the volatile transportation category, orders fell just 0.6 percent. Both declines followed three straight months of increases.
Durable goods are items meant to last at least three years.
Economists tend to focus on orders for so-called core capital goods. Those orders fell 3.3 percent, but the drop followed four straight months of gains.
Core capital goods are considered a good measure of businesses’ confidence in the economy. They include items that point to expansion – such as machinery, computers and heavy trucks – while excluding volatile orders for aircraft and defense.
The big drop suggests the third quarter is off to a weaker start than some had hoped. While economists cautioned that it’s just one month of data, a few lowered growth estimates for the quarter.