Durable Goods New Orders Contract 6.9 Percent in June

(Positive) Real durable goods new orders in June 2016 were $241,664 million. Compared with one year ago, durable goods new orders were down 6.9 percent, which marks the second time in four months that orders have decreased compared with one year ago. June's contraction was the fastest since August 2012 (not counting the artificially large contraction in July 2015 due to inflated aerospace orders in July 2014). As a result, the annual rate of change, now -2.9 percent, contracted at a somewhat faster rate than last month. However, the overall trend in the annual rate of change was still moving in a positive direction for manufacturing.

Motor vehicle and parts orders increased at a rate of 1.5 percent compared with one year ago. That was the 18th straight month that MV&P orders increased. However, the rate of growth in the last three months was quite weak. The annual rate of growth has decelerated to its slowest rate of growth since May 2010, which was the last time the annual rate of change contracted. 

Aerospace orders decreased in June 45.2 percent compared with one year ago. Aerospace orders contracted in three of the last five months. In those three months of contraction it was primarily weakness in non-defense aerospace orders that caused the contraction.

We use real durable goods new orders to forecast activity in metalcutting job shops, metalworking, and durable goods.