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U.S. durable goods orders continue to surge in July on rise in motor vehicles and parts category
U.S. durable goods orders continued on a “V-shaped” recovery path in July, driven again by the motor vehicles and parts category. The data released today implies that overall durable goods demand have clawed back much of their falls in the lockdowns by July, boosted by the rapid recovery of motor vehicles and strong figures in most other categories. In all, new durable goods orders surged 11.2 percent sequentially in July, after a cumulative rise of 23.4 percent in the prior two months. The headline number was slightly above consensus expectations of 4.8 percent.
The transportation category continued its swift recovery, in spite of ongoing softness in nondefense aircraft. Orders for transportation equipment surged 35.6 percent in the month. July’s gain follows a 114 percent rise seen from May to June, with cumulative gains date placing the level of transportation orders 15.8 percent below their February level.
Stripping transportation, new orders continued to indicate widespread strengthening. Excluding the big rise in transportation equipment, new durable goods orders rose 2.4 percent sequentially, as compared with consensus expectations of 2 percent rise. Gains were widespread throughout categories, underlined by rising orders for equipment needed for unusual work and school arrangements in the pandemic, such as “computers and electronics” and electrical equipment.
Core capital goods orders and shipments continued to be resilient, posing upside risks to the outlook. New orders for core capital goods rose 1.9 percent sequentially.