US durable goods orders rise unexpectedly on defence bookings

ORDERS placed with US factories for durable goods rose unexpectedly in June, fuelled by a surge in defence aircraft and pointing to sustained demand for equipment despite rising interest rates. 

Bookings for durable goods - items meant to last at least three years - increased 1.9 per cent in June after a 0.8 per cent advance a month earlier, Commerce Department figures showed on Wednesday(Jul 27). The figures aren’t adjusted for inflation.

The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, rose 0.5 per cent for a second month.

The median estimates in a Bloomberg survey called for a 0.4 per cent decrease in overall orders. Core equipment bookings were projected to rise 0.2 per cent.

The pickup in orders suggests that firms are continuing to invest despite rising borrowing costs and economic uncertainty. That said, the monthly increase could partially reflect higher prices rather than new investment because the figures aren’t inflation-adjusted. BLOOMBERG