Economic Watch: Durable Goods Rebound, Still Down for 2015
New orders and shipments for manufactured durable goods rebounded in June following two straight monthly drops, while business investment also turned around, according to the Commerce Department.


New orders and shipments for manufactured durable goods rebounded in June following two straight monthly drops, while business investment also turned around, according to an advance report from the U.S. Commerce Department on Monday.
Shipments increased 0.1% from the month before, following a 0.3% drop in May. That increase was led by a 0.5% rise in transportation shipments.
New orders jumped 3.4% in June from May, the best performance since March. That increase was also pushed higher by the transportation sector, with new orders increasing 8.9%.
Excluding transportation, overall new durable goods orders in June increased 0.8%. Excluding defense, the hike was 3.8%.
An indicator of future business investment, new orders for nondefense capital goods excluding aircraft, increased 0.9% in June from the 0.4% decline month before. It was led by a 1.4% increase in new orders for machinery, while orders for computers and related products improved by 9.1%.
On the downside, these so called “core orders” through the first six months of this year are down 3.4% compared to the first half of 2014, while overall orders are down 0.6%.
“Despite a stronger than expected rise in June orders, business investment remains firmly in the red,” said Lindsey Piegza, chief economist with the investment firm Stifel Fixed Income. “With lingering uncertainty surrounding the U.S. recovery, businesses remain hesitant to invest in employees, structures, and equipment.”
She said these results, coupled with a strong U.S. dollar and weak demand both domestic and international, show business and revenues continue to be shipped overseas, undermining corporate balance sheets and earnings, and discouraging growth and investment.
“Without business development, hiring will remain lackluster and, more importantly, income growth will remain stagnant, continuing to restrain the American consumer,” Piegza said.
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