Upside surprise in US durable goods orders for July
A key gauge of demand for investment goods shot higher in July, partly as a result of a surge in orders for aircraft.
US durable goods orders, defined as those meant to last for more than three years, grew by 4.4% month-on-month to reach $208.114bn, according to the Department of Commerce.
Economists had penciled in a rise of 3.5%.
Excluding those from the transportation sector, which can be volatile from one month to the next, orders grew by 1.5% to $150.04bn (consensus: 0.4%).
Orders for non-defence aircraft and parts rose 89.9% to $12.49bn.
Core capital good orders, which exclude those for aircraft and from the defence sector, increased 1.6% month-on-month to $63.5bn.
"In our forecast, we anticipate roughly flat equipment investment for the remainder of this year. The strength in orders poses an upside risk to that forecast. Consistently, we are currently tracking 1.2% for equipment investment growth in Q3, up from 0% in our initial forecast. Consistently, we are currently tracking 1.2% for equipment investment growth in Q3, up from 0% in our initial forecast.
"On the whole, the June report shows much greater than expected strength in equipment investment. Today’s data boosted our Q3 GDP tracking estimate three-tenths, to 2.3%, as the rise in inventories boosted our estimate of the contribution from inventories in the current quarter," said Rob Martin at Barclays Research.