US factory goods shot up to a record amount in July
Washington - SPA
Business orders for U.S. factory goods shot up to a record amount in July, the government said Wednesday, reflecting a surge in demand in the volatile category of commercial aircraft.
However, outside of transportation, orders actually fell slightly during the month although the setback was expected to be temporary.
The Commerce Department reported that factory orders rose 10.5 percent in July, the biggest one-month increase on record going back to 1992. Orders for civilian jetliners rose four-fold. But excluding transportation, orders edged down 0.8 percent and a key category that serves as a proxy for business investment plans fell 0.7 percent.
Manufacturing has been a source of strength for the economy this year, helped by robust demand for new cars, other consumer items, and business equipment. Economists say that they expect that strength to continue.
The Commerce Department report showed that durable goods, items expected to last at least three years, were up 22.6 percent in July, unchanged from the estimate in a preliminary report last week. Orders for nondurable goods such as paper, chemicals, and food were down 0.9 percent in July after a 0.4 percent increase in June.
In addition to the surge in demand for airplanes, orders for motor vehicles and parts rose 7.3 percent, reflecting continued strong consumer demand for new cars and trucks.
But there was slippage in other areas. Orders for primary metals such as steel fell 0.3 percent, demand for machinery was down 1.2 percent, and orders for computers and other electronics products fell 14.7 percent.
Despite this weakness, most economists expect that manufacturing production will provide solid support for economic growth in the second half of this year.