New orders for manufactured durable goods in the U.S. took a significant hit in June, falling to $264.5 billion, according to the latest data from the Census Bureau. This represents a 6.6% decrease from the previous month, marking the first drop in five months and the steepest monthly decline since January. The new figures are also at their lowest level since November 2021.
Sector-Wide Decline
The downturn was broad-based, with durable goods orders excluding defense plummeting by 7% month-over-month. This sharp drop followed a modest 0.2% decline in the previous period, highlighting the growing challenges facing the manufacturing sector.
Business Spending Shows Resilience
Despite the overall negative trend, there was a bright spot in the report. Orders for non-defense capital goods excluding aircraft, a key indicator of business spending plans, rose by 1% from the previous month. This is the largest increase since March 2022 and surpassed market forecasts of a 0.2% rise, suggesting that businesses remain optimistic about their investment plans despite broader economic uncertainties.
Implications for the Economy
The sharp decline in durable goods orders raises concerns about the health of the manufacturing sector and its potential impact on the broader economy. The significant drop, coupled with the overall economic environment, could signal a slowdown in industrial activity.
