Durable-Goods Orders Fell 2% in June, Worse Than Expected

When it comes to durable goods, the trend is still nobody's friend.

Orders for durable goods fell by 2% in the month of June, far worse than the 0.8% decline expected by economists polled by Reuters. The report confirms steady, continuing weakness in the manufacturing sector, showing that businesses overall aren't investing any money on capital. This isn't really much of a surprise, considering the change in the economy, but it's dreary nonetheless.

Excluding transportation equipment, which can be volatile, orders fell 1.5%. Orders of primary metals dropped 1.8% in June, while orders of computers and electronic equipment dropped 3.2%.

The annualized trend is more disturbing. On a year-over-year basis, durable goods orders are down 22.1% from this time a year ago. Excluding transportation orders, spending on durable goods is off 15.6%. The year-over-year decline is pronounced in all areas, ranging from the 6.7% decline in fabricated metal products to the 61% decline in communications equipment. Orders of nondefense capital goods, a good measure of business investment, are dropping at a 23.5% annualized rate.

The revised numbers for May show a 2.7% increase in durable-goods orders, down from the 3% preliminary figure.