New orders for long-lasting US manufactured goods recorded their biggest gain in two years in July, buoyed by a surge in aircraft orders, a government report showed today.
Durable goods orders jumped 4.9 per cent, the largest advance since July 2007, after falling by a revised 1.3 per cent in June, previously reported as a 2.2 per cent drop, the Commerce Department said.
Analysts polled by Reuters had forecast orders rising 3 per cent in July. However, compared to the same period last year, new orders were still down 25.8 per cent.
US stock index futures briefly rose on the report and then dropped, while government bond prices were unchanged.
"The headline figure was up more much than expected, driven by a large increase in the transportation sector, not surprisingly. Excluding that, it was about as expected," said Dan Greenhaus an analyst at Miller Tabak & Co in New York.
Orders in July were boosted by a surge in civilian aircraft orders at Boeing while the reopening of Chrysler and General Motors assembly plants after emerging from bankruptcy raised automobiles output and led to an increase in orders for motor vehicles.
New orders for transportation equipment jumped 18.4 per cent, the biggest increase since September 2006, while capital goods orders rose 9.5 per cent in July - the largest gain since December 2007.
New orders excluding transportation climbed 0.8 per cent in July, rising for a third straight month, a touch below market expectations for a 0.9 per cent advance, after a 2.5 per cent increase in June. It was the first successive three-month advance since the first quarter of 2006.
Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, slipped 0.3 per cent in July. Analysts polled by Reuters had expected core capital goods to increase 1 per cent.
The prior month was revised to show a 3.6 per cent rise, previously reported as a 2.6 per cent increase.
Durable goods orders are a leading indicator of activity in manufacturing, which in turn provides a good barometer for overall business health.
Reuters