Durable Goods Orders (Ex-Transports) Beat Expectations In June

US durable goods orders dropped 9.3% in June, the largest decline since the COVID-19 lockdowns, but this was largely due to a 50% decline in non-defense aircraft orders. Excluding aircraft orders, durable goods orders actually increased 0.25%, beating expectations. The value of core capital goods orders, a proxy for investment in equipment, decreased 0.7% in June. However, capital goods shipments rose 0.4%, excluding defense and commercial aircraft, which could contribute to Q2 GDP growth. The durable goods orders data is often noisy due to the lumpiness of aircraft orders. The market reaction to the mixed data was muted. The June data follows a surge in May, driven by large Boeing aircraft orders. The durable goods orders data is considered a secondary economic indicator. Despite the decline, year-over-year orders are up 2.23%. The data presents a mixed picture, with some positive signs for the economy. Overall, the report did not have a significant impact on the market.