Durable Goods Orders Fall In June

The Commerce Department reported that orders for durable goods fell 2.5% in June, much larger than the 0.6% decline that economists had expected. It was the biggest setback since the 7.8% fall in January. However, when the volatile transportation sector was excluded from the results, orders for durable goods were actually up by 1.1% last month, a better performance than the flat reading economists had expected.

Much of the weakness reflected a 38.5% decline in orders for commercial aircraft, an industry hurt by the global recession, which has crimped air travel and triggered some airlines to cancel existing orders for planes. Orders for motor vehicles and parts fell by 1% in June after an even larger 8.7% drop in May.

Economists said that the big drop in the overall number overstated the weakness in the orders report and that the 1.1% rise excluding transportation, was a far better measure of where manufacturing is heading at the moment.