US Durable Goods Rise by 22% in July

The U.S. economy built more momentum in July, as the as the Department of Commerce reported an increase in durable goods orders, adding to June’s gains.

Tuesday the department released its advance report, which showed that new orders for manufactured goods increase by $55.3 billion, or 22.6%, to $300.1 billion last month, following June’s revised 2.7% rise. 

“This increase, up five of the last six months, was at the highest level since the series was first published on a NAICS basis in 1992…” the report said.

According to consensus estimates, compiled by media organizations, economists were expecting durable goods to rise between 7.0% and 8.0%, as a result of increased orders for airplanes from Boeing.

Andrew Grantham, senior economist at CIBC World markets, said that although durable goods data was three times higher than expected, the increase does not come as a major surprise.

“Record aircraft sales were always expected to see headline durable orders soar in July, the only question was how high,” he said.

Paul Dales, senior U.S. economist said that aircraft orders increased more than 300%; however he added that this won’t impact the nation’s economic activity because “GDP measures output produced rather than orders received.”
“This won’t boost GDP until those orders are completed late this decade,” he added.

via Kitco

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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, Alfonso Esparza 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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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