Durable goods orders are due out at 8:30 a.m. ET, with expectations of a gain of 3.1 percent, with estimates ranging from 0.6 percent to 6.4 percent according to Bloomberg News. The increase in headline orders topped the seasonally adjusted 2.6% forecast of economists polled by MarketWatch. Orders for aircraft and parts were sharply higher, with nondefense planes soaring 66.1 percent and those for defense up 16.9 percent.
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New orders for transportation equipment increased 8.9 percent to $78.4 billion.
“Given that GDP measures output rather than orders, the surge in aircraft orders will not show up in the national accounts data until much later since the lead times between orders and production for aircraft are long”, he added.
Headline orders rose 3.4% while orders excluding transportation and defense rose 0.8%, according to the Census Bureau. Orders for motor vehicles and parts posted a modest 0.2 percent increase.
The report said increases in orders for electrical equipment, appliances, and components, fabricated metal products and machinery were partly offset by a decrease in orders for primary metals.
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Core capital orders – those for nondefense capital goods excluding aircraft – rose 0.9 percent after falling the previous two months. Meanwhile, inventories, up in all but one of the last 25 months, edged up 0.4 percent to $402.3 billion, following a drop of 0.2 percent in May. Overall, durable goods has been very weak so far this year, with mostly flat readings for the closely watched capital goods group.
