Durable Goods Drop in July
Posted August 30, 2013 & filed under Job Search, References
What the heck happened to US durable goods in July? After sharply rising for 4 straight months – from March through June – orders for US made durable goods took a sharp dive in July. The US Department of Commerce reports that orders dropped by 7.3% over the course of the month, a decrease that ranks as the largest of the year by far.
Core capital goods – such as machinery, computers, and heavy trucks – took a 3.3% hit to their orders alone. This is likely the result of decreased spending on electronics, particularly PCs, whose sales are predicted to fall at a staggering 9.7% in the coming months. Even orders for commercial aircrafts sunk, making July the weakest month the industry has seen in quite some time.
And the good news is…
These numbers certainly came as a shock to many economists, who predicted that the stellar growth of the 2nd quarter would carry over into the 3rd quarter. The good news: economists say that these numbers only represents a single month. They still predict positive numbers throughout the end of the year (although their predictions for next quarter have now dropped from 2.1% to 1.9% due to recent numbers).
Adding more good news to the mix is the rise in unfulfilled orders, which rose to their highest levels since 1992. Fulfilling those orders will surely add a boost to the much needed sales of US durable goods. Additionally, orders for cars and car parts jumped up 0.5%, and cars sales increased 14%, adding to the much needed recovery of auto manufacturers and car companies.
Where do we go from here?
As the second half of the year begins, US exports are predicted to climb. With Europe pulling itself out of the throngs of recession, orders on US durable goods should begin to rise once again, and this subpar month of sales will only be remembered as nothing more than a fluke.
By Kevin Withers
