US Factory Orders Drop in July

New orders for U.S. factory goods dropped in July by the most in four months, a worrisome sign for economic growth in the third quarter.

The Commerce Department on Thursday said new orders for manufactured goods dropped 2.4 percent. Analysts polled by Reuters had expected an even sharper decline.

The decline was spread broadly across the nation’s factories, from those producing computers and machinery to cars and electrical equipment.

Manufacturing slowed in the spring, hobbled by tight fiscal policy and weak global demand.

While a survey in August of purchasing managers by the Institute of Supply Management pointed to improving confidence in the sector, the picture in July still looked dour.

New orders for capital goods other than military items and aircraft, which is seen as a gauge of business spending plans, dropped 4 percent in July, its steepest decline since February.

Shipments of this category, which directly feed into the Commerce Department’s calculations of economic growth, also slipped.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza