The numbers: Orders for long-lasting goods made in America jumped 4.7% in June due to a flush of new contracts for Boeing passenger planes. A key measure of business investment also rose for a third month in a row in a good sign for the economy.
Economists polled by the Wall Street Journal had forecast a 1.5% increase in orders for durable goods, or big-ticket items meant to last a long time.
Orders rose a milder 0.6% if transportation is excluded, the government said Thursday. The transportation segment is a large and volatile category that often exaggerates the ups and downs in manufacturing.
More notably, a key measure of business investment rose again and suggested the manufacturing sector has improved a bit after bottoming out earlier this year.
Durable goods are items like planes, cars, appliances and computers. Orders rise in an expanding economy and shrink in a contracting one.
Key details: New orders for passenger planes have caused big swings in the durable-goods report this year. The same was the case in June. Bookings jumped 69% last month, largely because of a large order for Boeing
BA,
planes submitted by Air India.
Orders for new autos rose a scant 0.3% last month
Stripping out planes and cars, orders increased by a mild 0.6%. Every major category saw an increase, however.
A key measure of business investment, meanwhile, rose 0.2%. These so-called core orders are up just 1.9% in the past year, though, compared to a 7.2% pace in the same month in 2022.
Businesses are also worried about the possibility of a recession in the next year. Companies invest less when they expect the economy to soften.
Big picture: The industrial side of the economy is not getting much better, but it’s not getting any worse, either. Higher interest rates have discouraged expensive investments while consumers have shifted their spending to services such as travel and recreation.
Manufacturers are likely to muddle along until the economy improves or the threat of recession recedes.
Looking ahead: “The U.S. economy is proving to be remarkably resilient,” said Priscilla Thiagamoorthy, senior economist at BMO Capital Markets.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Thursday trades.
This post was originally published on Market Watch
