WASHINGTON – U.S. sales of big-ticket manufactured goods rose at the quickest pace in nearly three years in June, driven by surging demand for civilian aircraft.
Continue Reading Below
Orders of durable goods -- products designed to last at least three years, such as cars and refrigerators -- grew a seasonally adjusted 6.5% from a month earlier, the Commerce Department said Thursday.
Economists surveyed by The Wall Street Journal projected a 3.8% increase.
Outside of transportation goods, orders rose 0.2%, reflecting a dip in demand on a range of goods such as cars and computers.
The report offered a mixed assessment of the economy. Durable-goods orders have risen steadily this year: They are up 5% in the first six months compared with the same period in 2016. That suggests that over the broader term, businesses and consumers are confident and able to boost spending, supporting stronger economic growth.
"The underlying details...suggest that, after surging in the first quarter, business equipment investment posted a decent gain in the second quarter," Andrew Hunter, an economist at Capital Economics, said in a note to clients.
Continue Reading Below
The latest data add to evidence that economic output grew at a 2.8% annual rate in the second quarter, according to his firm's estimate. Output expanded at a 1.4% pace in the first quarter, government figures show.
One reason for caution: Last month's rise in durable orders was contained largely in one segment of the economy--transportation--that is volatile. It largely reflects better business at aircraft makers such as Boeing Co., which is benefiting from a rise in global passenger airline traffic and higher sales of jetliners.
Businesses outside of transportation cut capital spending last month after two months of steady growth. Orders for nondefense capital goods excluding aircraft, a proxy for spending on equipment and software, fell 0.1%. That marked the first drop since December.
Business investment spending climbed in the second quarter overall and has grown 2.8% this year compared to the same period last year.
Orders for cars fell 0.6% in June from May but are up 1.6% this year over last.
Write to Josh Mitchell at email@example.com
(END) Dow Jones Newswires
July 27, 2017 10:41 ET (14:41 GMT)