Durable goods orders may have peaked in July
Manufactured durable goods orders rose 11.2% in July, far outpacing economists' expectations, and jumping for the third straight month. July's unexpected increase followed a 7.7% gain for durable goods in June.
What happened: The boom was largely the result of vehicle purchases, as orders for new cars and trucks jumped 22% after a nearly 24% gain the previous month.
- Excluding transportation, new orders increased 2.4%. Excluding defense, new orders increased 9.9%. Transportation equipment, also up three consecutive months, led the increase, up 35.6%.
Between the lines: The 11.2% increase for durable goods overall was especially strong, but in terms of actual sales durable goods orders remain depressed, and at $239.7 billion have only returned to August 2017 levels.
- Auto sales have been surprisingly strong thanks to low interest rates and discounted pricing by dealers, but as Axios' Joann Muller notes the surge in demand has led to a seller's market with "fewer choices and higher prices" for consumers.
- Sales to corporate customers are still low and demand usually wanes in the fall, meaning it could be tough to get back to early 2020 levels.
Of note: Airline orders only declined half as much in July as they did in June, reflecting fewer cancellations.