Durable goods orders surge in July

New orders for manufactured durable goods in July increased $55.3 billion, or 22.6% to $300.1 billion, according to the U.S. Census Bureau report.

This increase, up five of the last six months, was at the highest level since the series was first published in 1992, and followed 2.7% gains in June. But most of the strength came from demand for commercial aircraft, which tends to fluctuate sharply from month to month.

Excluding transportation, new orders decreased 0.8% Excluding defense, new orders increased 24.9%. Transportation equipment, also up five of the last six months, drove the increase, $56.6 billion or 74.2% to $133.0 billion. Durable manufactured goods include everything from household appliances and automobiles to planes and military tanks.

Economists expect factory output will likely support solid economic growth in the second half of this year.

Shipments of manufactured durable goods increased $8 billion, or 3.3% to $248.9 billion in July, also the highest level since 1992, according the report. Transportation equipment, up two consecutive months, led the increase, $5.6 billion or 7.9% to $76.3 billion.

Unfilled orders for manufactured durable goods in July rose $59.2 billion, or 5.4% to $1,158.5 billion. Transportation equipment, up 10 of the last 11 months, led
the increase, $56.7 billion or 8.3% to $738.4 billion.

While orders and shipments are up, inventory levels also rose 0.5% for manufactured durable goods in July. Inventories have risen in 15 of the last 16 months to total a record level $401.9 billion in July.