It turns out that the Durable Goods orders were rather durable in June. The new orders rose 3.4% for big ticket items, above the 3.1% expected by Bloomberg. Unfortunately, the prior month’s -1.8% reading was revised to a slightly worse -2.1%. That means that the report will be a net wash when it comes to analysts and economists making changes for Gross Domestic Product (GDP).
Excluding transportation, new orders were up by 0.8% in June. That compared to the Bloomberg consensus of a gain of 0.5%, while the prior report was revised to a slight drop of -0.1% from a gain of 0.5%.
There is also a core capital goods orders reading which showed a gain of 0.9%. Civilian aircraft orders were up 103% in June, but that was after a 46% drop in May. You can thank the large international airshow orders for that surge in what is often a seasonal volatility that gets smoothed out through time.
Small gains were seen in motor vehicles and in the computers and electronics segment of the report, with large gains seen for machinery and fabricated metals. Strong data was also seen in construction and in electrical equipment.
All in all, these durable goods figures were among the best of 2015. Investors and economists should not be looking for this to greatly change the GDP report, not unless there are big revisions to the reports.
Markets were already weak ahead of this report due to the Shanghai market’s worst drop in 8 years Shanghai-ing the rest of the markets. The S&P 500 was last seen down 10 points and the DJIA was last seen down 120 points.
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