Transportation Drags Down Durable Goods
WASHINGTON (
) -- Cars and planes dragged down durable goods in June, resulting in the largest decrease in orders in five months.
Manufacturers' orders for durable goods dropped by 2.5% last month to $158.57 billion, the Commerce Department said on Wednesday. Economists had forecast a 0.6% drop.
This was the biggest setback since a 7.8% tumble in January.
Orders for planes plunged 38.5%, as the recession has severely strangled air travel, forcing some airlines to cancel existing orders for planes.
Aircraft giant
Boeing
(BA) - Get Report
suffered production delays of its new 787 Dreamliner.
Motor vehicles and parts orders slipped 1% in June, reflecting bankruptcy filings of General Motors and Chrysler, and the more generalized woes of
Ford
(F) - Get Report
.
But excluding the messy transportation sector, durable goods actually rose 1.1%, boosted by demand for primary metals, such as steel, which jumped 8.9%, and industrial machinery, which rose 4.4%.
This steadiness outside transportation could be a sign that there are brighter days ahead.
Shares of durable goods company
Black & Decker
(BDK)
dropped 0.4% to $37.25,
Whirlpool
(WHR) - Get Report
slipped 1% to $54.58 and
Stanley Works
(SWK) - Get Report
was off 2% to $38.90.
--Reported by Jeanine Poggi in New York.
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