The Census Bureau reported that new manufactured goods orders fell 2.4 percent in July, its largest monthly decline in six months. To a certain extent, this was largely anticipated, particularly after the release of extremely weak durable goods orders last week. As noted with that release, the decline in durable goods sales was largely fueled by sharp declines in airplane orders, which can be quite choppy from month to month. To illustrate the impact of this one segment, new orders in July would have increased 1.2 percent with transportation sales excluded.
Outside of aircraft, new durable goods orders were mostly mixed. Gains in fabricated metal products (up 0.6 percent) and furniture and related products (up 0.3 percent) were partially offset by losses in electrical equipment and appliances (down 4.3 percent), computers and electronics equipment (down 3.5 percent), and machinery (down 1.1 percent).
One of the new data points in this report was information about nondurable goods orders, which increased 2.4 percent in July. That was a healthy jump, particularly following weaker sales in the spring months from March to June. New durable goods orders had fallen 0.5 percent, for instance, in June.
On a year-over-year basis, new manufactured goods orders rose 1.4 percent, suggesting a very modest pace for new sales over the course of the past year.
Meanwhile, shipments of manufactured goods increased 1.1 percent in July, reversing the 0.3 percent decline in June. Shipments have grown at a somewhat faster clip than new orders over the past 12 months, up 2.6 percent year-over-year. The year-to-date pace has been slower than that, however, up 1.1 percent through the first seven months.
In July, there were higher shipments reported in the petroleum and coal products (up 7.0 percent), beverage and tobacco products (up 2.5 percent), primary metals (up 1.5 percent), apparel, textile mills and textile products (up 1.2 percent each), and food products (up 1.0 percent). Some of the weaker areas included defense aircraft and parts (down 4.6 percent), computers and electronic products (down 3.1 percent), and machinery (down 1.5 percent) sectors, among others.
Chad Moutray is the chief economist, National Association of Manufacturers.
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