Durable Goods Orders Up Slightly Last Month
WASHINGTON (AP) — Business cut back on orders for long-lasting U.S. factory goods last month, outside aircraft and other transportation equipment. That suggests the sluggish economy is weakening manufacturing.
Orders for durable goods rose by a seasonally adjusted 1.6 percent in June. That matched May's increase, the Commerce Department reported Thursday.
But excluding transportation equipment, orders actually fell 1.1 percent, the third decrease in four months. Durable goods are products meant to last three years, such as steel, autos and computers.
Orders for so-called core capital goods, a measure of business investment plans, fell 1.4 percent. That's the second drop in three months and indicates companies are growing more cautious about spending as the economic outlook darkens.
Manufacturing, which has helped drive growth since the recession ended three years ago, has slowed in recent months, along with the broader economy.
Factory activity shrank in June for the first time in nearly three years, according to a survey by the Institute for Supply Management, a trade group. And the Federal Reserve Bank of Philadelphia said last week that manufacturing in that region contracted in July for the third straight month.
There have been a few positive signs.
A survey from Federal Reserve Bank of New York found that manufacturing expanded in that region this month.
And some large industrial companies reported healthy earnings Wednesday. Heavy equipment maker Caterpillar said its second-quarter profit jumped 67 percent, largely because of strong demand for construction and mining equipment. It expressed confidence that the global economy would improve next year.
Healthy sales of passenger jets pushed up Boeing Co.'s second quarter profits 3 percent, the company said Wednesday, a better showing than many analysts expected. But Ford Motor Co. said its net income fell 57 percent, largely because it lost $404 million in Europe.