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

Economists expected a 0.8% decline. The report shows businesses aren't investing any money in capital.

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


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. 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.