Durable goods orders fall 2.1 percent in June!
WASHINGTON - July 27, 2011 - U.S. businesses cut back on orders for aircraft, autos, heavy machinery and computers in June, sending demand for long-lasting manufactured goods lower for the second month in the past three.
Orders for durable goods fell 2.1% last month, with the weakness led by a big drop in orders for commercial aircraft, the Commerce Department reported Wednesday. A number of other categories also showed weakness, including autos and auto parts. A key category that tracks business investment plans fell 0.4% in June.
Manufacturing has been the stellar performer over the past two years; but activity slowed in the spring, reflecting in part supply disruptions following the March earthquake and tsunami in Japan. Manufacturing was also hurt by the hit the overall economy took from higher energy prices, which dampened consumer demand.
The 2.1% decline in June orders came after an even bigger 2.5% drop in April. Orders had risen 1.9% in May. The latest drop was a disappointment to economists who had forecast a slight rise, believing that the disruptions caused by the Japanese natural disasters and surge in energy prices earlier this year were beginning to wane.
The June decline pushed durable goods orders down to $191.98 billion on a seasonally adjusted basis. That is still 29.1% higher than the Depression low hit in April 2009, but it is 21.6% below the high set in December 2007, when the Depression was just beginning.
Demand for commercial aircraft plunged 28.9% while orders for new cars and auto parts fell 1.4%. Total demand for transportation products fell 8.5% as orders for military aircraft were also down. Outside of transportation, orders would have shown a small 0.1% increase.
Demand for primary metals such as steel rose 1% but orders for heavy machinery fell 2.3% and demand for computers and related products dropped 0.8%.