Macro Flash Report

Durable Goods Orders

Takeaway: June’s Durable Goods Orders indicated a significant slowdown, ending a streak of growth and highlighting potential challenges in demand, especially within the transportation sector. However, there were signs of resilience in other areas, suggesting some underlying stability in the broader market despite the overall weak demand signals.

Durable Goods Orders & Durables Ex Transportation

Durable Goods Orders fell by -6.6% from May’s 0.1% increase, ending a streak of four consecutive months of growth and missing the market expectations of a 0.3% rise. This marked the sharpest drop since the pandemic and was mainly due to the transportation segment.

• The primary driver of the decline, transportation equipment dropped by -20.5%, which included significant decreases in orders for motor vehicles and parts (-0.1%).
• Additionally, orders for capital goods (-18.4%) and primary metals (-0.1%) also faced notable declines.
• However, orders increased for fabricated metal products (0.2%), machinery (1.6%), and electrical equipment, appliances, and components (1.3%).

Conversely, Durables Ex Transportation increased by 0.5% in June, recovering from a -0.1% decrease in May and above the anticipated 0.2% rise.

• This highlights a broader rebound in durables good, which previously had been dragging compared to transportation in May.
• This suggests some areas of resilience in durable goods, as the topline signals potential challenges ahead with weakening demand.

Notably, orders for non-defense capital goods excluding aircraft, a key indicator of business spending plans, rose by 1% in June, following a -0.9% decline in May and surpassing market forecasts of a 0.2% increase.