U.S. Durable Good OrdersUp 3.4% in June

 
   By David Harrison and Eric Morath 
 

        WASHINGTON-- Orders for long-lasting manufactured goods rose in June, snapping a two-month streak of declines and suggesting greater confidence among businesses.
        New orders for durable goods - products such as toaster ovens and aircraft carriers designed to last at least three years - rose a seasonally adjusted 3.4% in June from a month earlier, the Commerce Department said Monday. May durable goods orders fell a revised 2.1% compared with the previously reported 2.2% decrease.
        Economists surveyed by The Wall Street Journal had expected overall orders to rise 2.7%.
        Durable goods statistics are volatile and subject to large revisions. Still, other recent data indicate the manufacturing sector is improving as the economy shores up.
        June's increase in part reflects a surge in aircraft demand, a heavyweight component of the report that often swings dramatically from month to month. Orders for nondefense aircraft and parts were up 66.1% in June. Separately, Boeing Co. said it received 161 orders for planes in June, up from 11 in May.
        Excluding the transportation sector, orders rose 0.8%. That was the largest increase since August 2014.
        Excluding defense - another volatile sector - orders rose 3.8%.
        A key measure of business investment also rose in June. Orders for nondefense capital goods excluding aircraft, which is considered a proxy for business spending on equipment and software, climbed 0.9%, following a 0.4% decrease in May.
        Monday's report adds to indications that U.S. manufacturers may be overcoming challenges from a strong dollar, harsh winter weather and a drop in the price of oil, which has depressed spending on mining and oil and gas machinery. In the first half of 2015, new orders are down 2% compared to the same period a year earlier.
        Industrial production, a measure of output in the manufacturing, utilities and mining sectors, rose a seasonally adjusted 0.3% in June, according to a revised Federal Reserve report released earlier this month.
        And a survey of supply-chain executives conducted by the Institute for Supply Management found renewed optimism among purchasing managers.
        The Commerce Department is set to release its first reading of second-quarter economic growth Thursday, which will include estimates of business spending's impact on gross domestic product. Real nonresidential fixed investment dropped at a 2% annual rate in the first quarter. That contributed to the annualized 0.2% contraction in GDP recorded in the first quarter of the year, according to the Commerce Department.
        Economists expect the second quarter reading to recover. Employers have continued to add jobs and the unemployment rate has fallen to 5.3%. But sluggish retail spending suggests that consumers remain wary.
        The Commerce Department's durable goods orders report can be found at http://www.census.gov/manufacturing/m3.
        (END) Dow Jones Newswires

        July 27, 2015 08:30 ET (12:30 GMT)

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