MW: Factory orders fall sharply for second straight month in June
WASHINGTON (MarketWatch) – Factory orders fell 1.5% in June, the second consecutive sharp decline, the Commerce Department reported Thursday.
May’s factory orders fell a revised 1.2%, compared with the prior estimate of a 1% drop.
In June, orders were dragged down by durable goods orders -products meant to last at least three years – which fell a revised 3.9% in June, a slight improvement from the prior estimate of a 4% fall.
The government puts out an advance estimate of durable goods about one week prior to the full factor orders report.
Based on the advance data, economists surveyed by MarketWatch had expected June factory orders to fall 1.7%.
Transportation equipment orders had the biggest decline in June, falling 10.5%. Excluding the transportation sector, which can be volatile, orders were up 0.4%.
Tom Simons, an economist at Jefferies, said the factory sector is still suffering from a significant swoon that dates back to late 2014.
Business investment has dropped for three straight quarters.
Non-durable goods orders rose 1% in June.
Orders of non-defense capital goods excluding aircraft rose 0.4% in June after a 0.6% drop in May. Shipments of these goods, a category used to help determine quarterly economic growth, slipped 0.2% in June. That’s negative for second-quarter gross domestic product.
Inventories of nondurable goods, another category in the calculation of quarterly GDP, rose 0.2% in June.
