Key Facts
• On August 26, the US Department of Commerce released July durable goods data.
• Core capital goods orders (excluding defense and aircraft) rose 1.1% month-on-month.
• Economists had forecast a 0.2% increase; June data revised from -0.8% to -0.6%.
• Core capital goods shipments increased by 0.7%, up from 0.4% in June.
• Overall durable goods orders fell 2.8%, driven by a decline in civilian aircraft orders.
• Boeing reported only 31 orders in July, down from 116 in June.
• Economists predict aircraft orders will rise in 2025 due to trade agreements.
• Citigroup economist Veronica Clark warns of potential future declines in aircraft demand.
Summary
The US Department of Commerce reported a 1.1% increase in core durable goods orders for July, surpassing the 0.2% forecast. This growth suggests a strong start for business investments in Q3. Core capital goods shipments also rose by 0.7%. However, overall durable goods orders dropped 2.8%, primarily due to a sharp decline in civilian aircraft orders, with Boeing receiving only 31 orders compared to 116 in June. Economists anticipate a rebound in aircraft orders in 2025, but some, like Citigroup’s Veronica Clark, caution that recent surges may reflect front-loaded demand, potentially leading to future declines. The data highlights mixed trends in the US durable goods sector.
