Economy

US Factory Orders Down More Than Expected in July

US Factory Orders Down More Than Expected in July”

Factory goods orders tumbled 3.3 percent amid a slump in demand for transportation equipment, the Commerce Department said on Tuesday. Manufacturing, which makes up about 12 percent of the USA economy, is strengthening even as the boost from oil and gas drilling is starting to fade as ample supplies restrain crude oil prices.

Following this, then, orders for computers and electronic products increased 2.1 percent in July. The drop in July was due for the most part because of a drop of 19.2% in orders that were part of the highly volatile category of transportation equipment.

Orders at US factories tumbled in July, dragged down by a sharp fall in orders for civilian aircraft. Orders for non-defense capital goods excluding aircraft jumped 1%. Data shows, in fact, that business investment on equipment jumped almost 9 percent between April and June, and that is the fastest pace since quarter in 2015.

Civilian aircraft orders, which vary often times quite wildly from one month to another, fell by nearly 71% during July after they gained over 129.3% the previous month.

Growth has started to pick up across Japan, Europe and other areas of the developing world.

Despite the sharp fall in overall orders, the increase in the business investment category suggests companies are more optimistic about future demand from customers. A private survey last week showed USA factories expanded at a brisk pace in August, another bright sign for the overall economy. That is an impressive gain for this year, also supported by 2.6 percent gains in electrical equipment orders and appliance and components orders.

Motor vehicle orders fell 0.9 percent after being unchanged in June. Durable goods' orders were down over 6.8% following a June surge of more than 6.4%.



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