Washington: Orders for major US manufactured goods spiked in June to a three-year high as civilian aircraft orders more than doubled, the Commerce Department reported yesterday.
The monthly gain in durable goods orders was more than enough to reverse the consecutive declines of the prior two months and was also more than twice the gain expected by analysts.
The increase came after aircraft giant Boeing’s unusually good outing at the Paris air show in June, when the company booked sales for 571 new aircraft amounting to $74.8bn. The company Wednesday announced better-than-expected profits and had a more upbeat outlook for the year.
While the increase in June durable goods orders was driven by the highly volatile transportation sector, it was added to significant upward revisions in May in several sectors.
The report could bode well for growth in the second quarter, with the preliminary GDP estimate, that will be published today, is expected to show a 2.8 percent expansion, according to a consensus analyst.
President Donald Trump has spotlighted the manufacturing sector as part of a nationalist economic agenda and on Wednesday unveiled a $10bn investment in Wisconsin by Apple supplier Foxconn.
Total orders for durable goods jumped 6.5 percent from May to $245.6bn, the biggest one-month gain since July 2014. For the year to date, orders are up five percent over the same period in 2016.
Civilian aircraft, which see major swings from month to month, surged 131.2 percent in June.
Excluding the highly volatile transportation sector, orders rose only 0.2 percent, down from the 0.4 percent increase in May, and three-tenths below an analyst forecast for the segment.
“All in all, orders were not bad and should leave the advance GDP on track to attain 2.5 percent growth at an annual rate,” said Chris Low of FTN Financial.
The capital goods sector jumped 19 percent, another three-year high, but this also was driven entirely by aircraft.
Autos fell 0.6 percent, giving up some of May’s 1.6 percent gain. Computers and electronic parts also fell 0.3 percent.
Non-defence capital goods orders excluding aircraft, a segment which has suffered in recent years as falling oil prices curtailed investment in drilling for crude, slipped 0.1 percent in June after the 0.7 percent gain in the prior month.
