Orders for big ticket US manufactured goods jumped 11.2%

WASHINGTON – Orders to U.S. factories for big-ticket manufactured goods jumped 11.2 per cent in July, the third consecutive monthly gain.

And the jump last month was even larger than the 7.7 per cent increase in June, the Commerce Department reported Wednesday.

The strong advance last month, however, was led by the volatile transportation sector, which spiked 35.6 per cent. Excluding transportation, orders would have risen by a more modest 2.4 per cent.

A closely watched category that serves as a proxy for business investment plans rose a solid 1.9 per cent in July after a 4.3 per cent rebound in June.

While the gains in orders for durable goods is welcome, economists caution that could falter if coronavirus infections surge in the fall, forcing more factory shutdowns and a return to the near economic stall the U.S. went through this past spring.

“The details of the report indicate that businesses remain wary as the initial post-lockdown burst in activity is winding down and the public health situation isn’t under control,” said Lydia Boussour, senior U.S. economist at Oxford Economics.

The big jump in transportation was led by a 21.9 per cent surge in orders for motor vehicles and parts which offset another big decline in demand for commercial aircraft as airlines continue cancelling previous orders in the face of a plunge in air travel linked to the coronavirus.

The 11.2 per cent rise in orders in July left total durable goods orders at a seasonally adjusted $230.7 billion.

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