Orders to US factories for long-lasting manufactured goods fell in June by the largest amount in nearly two years, reflecting a big decline in the volatile category of commercial aircraft. The key category that tracks business investment managed a small gain.
Demand for durable goods dropped 4% in June, the biggest setback since an 18.4% drop in August 2014, the Commerce Department reported Wednesday, Reuters reported.
The new report indicates manufacturing remains under stress from weak global demand and a strong dollar.
June’s result was led by a 58.8% plunge in orders for commercial aircraft. Outside of transportation, orders were down 0.5%.
Demand in a closely watched category that serves as a proxy for business investment plans edged up a slight 0.2% after two months of declines. This category has shown monthly increases only three times so far this year. Orders in the investment category through the first half of this year are down 3.8% compared to the same period a year ago.
American manufacturers are struggling with a strong dollar, which makes US products more expensive on foreign markets, and a sluggish global economy. Concerns about a slowing Chinese economy roiled financial markets at the beginning of the year. Markets were again sent into a brief tailspin following the June 23 vote in Britain to leave the European Union.
The 4% decline in orders in June followed a 2.8% drop in May and a 3.2% rise in April.
For June, one of the few areas of strength was autos and auto parts, which increased 2.6%. Orders for primary metals such as steel, computers and machinery all declined.
CCI Up
Consumers were feeling a bit more optimistic than expected in July, as a key economic indicator held gains from June, according to a survey released on Tuesday.
The consumer confidence index hit 97.3 in July, The Conference Board said. Economists expected consumer confidence to fall to 95.8 in July, according to a Thomson Reuters consensus estimate.
June’s consumer confidence reading was revised down to 97.4 from 98.
The survey, a closely followed barometer of consumer attitudes, measures sentiment toward business conditions, short-term outlook, personal finances and jobs.
Attitudes toward the current labor market were relatively steady, and the outlook for future job growth was marginally more favorable, the board said.
