Durable Goods Orders In U.S. Probably Rose On Aircraft Rebound
Orders for U.S. durable goods probably rose in July by the most this year, reflecting a jump in aircraft demand that overshadowed slowdowns among other manufacturers, economists said before a report today.
The projected 2.5 percent increase in bookings for goods meant to last at least three years would be the biggest since December and follows a 1.3 percent June increase, according to the median forecast of 75 economists surveyed by Bloomberg. Figures on sales of capital equipment such as machinery and computers may have moderated, the survey showed.
Neil MacKinnon, global macro strategist at VTB Capital, discusses the global economy and investor sentiment. He talks with Guy Johnson on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
Boeing Co. reported it received orders for 260 aircraft last month, the most since December. At the same time, possible U.S. tax increases and spending cuts coupled with a global economic slowdown are hurting companies such as Caterpillar Inc. (CAT) and Deere & Co., indicating manufacturing will no longer be a driver of the expansion.
“It’s pretty much Boeing,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, who projected a 3.5 percent gain in durable goods orders. “You’ve seen businesses really slow their rate of inventory accumulation. They’ve also been slowing their investment spending. I think it’s because there’s so much uncertainty heading into the elections and what it means for the short-term fiscal situation.”
The Commerce Department data are due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from a drop of 2.5 percent to an increase of 7 percent. Bookings excluding the volatile transportation category may have climbed 0.5 percent after a 1.4 percent drop in June, economists projected.