ABC News details:
New orders for long-lasting U.S. manufactured goods unexpectedly fell for a second straight month in June, posting their largest decline since August, according to a government report on Wednesday that was further evidence economic growth cooled in the second quarter.While not good news, to me this is just noise. Looking at the chart below, which shows the month over month change and three month change by durable good type, we can see that most sectors that fell, fell from sectors that have rebounded over the past three months (transportation equipment, capital goods, machinery, and the overall index).
The Commerce Department said durable goods orders fell 1.0 percent after a revised 0.8 percent drop in May.
Analysts polled by Reuters had forecast orders increasing 1.0 percent in June from May's previously reported 0.6 percent fall. But non-defense aircraft orders tumbled 25.6 percent in June after falling 30.2 percent the prior month. Overall orders were also pulled down by bookings for computers and electronic products, which saw their largest decline since October.
My take? Things were never really as strong as market participants hoped and they aren't as weak as some may now think...
Source: Census
The Consumer Metrics Institute measures exactly this sort of activity, but in a real-time day-to-day style (via measurement of e-commerce activity which may be compiled immediately) and has been talking about the drop-off in durable goods for months now. What is surprising then is that people are surprised by it! A good test of the CMI's predictive power (which appears good at the moment...) is whether factory/downstream reports like this for the next 2-3 months continue to show contraction, as the CMI indicates they should...
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