U.S. orders for durable goods increased in August at a slower pace than expected, restrained by declines in bookings for motor vehicles and military equipment, though a gauge of business investment rose more than forecast.
Bookings for durable goods -- or items meant to last at least three years -- increased 0.4 per cent from the prior month after an upwardly revised 11.7 per cent jump in July, Commerce Department data showed Friday. The median estimate in a Bloomberg survey of economists called for a 1.5 per cent gain in August.
Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business investment, rose 1.8 per cent, after an upwardly revised 2.5 per cent gain.
The value of core business goods orders climbed to a two-year high and was boosted in August by further gains in machinery, computers and communications equipment. The figures suggest the manufacturing sector continues to rebound from its pandemic lows as companies replenish inventories, though the pace of orders growth is decelerating.
Other manufacturing gauges have been upbeat. The Institute for Supply Management’s manufacturing index expanded in August at the fastest pace since late 2018, powered by growth in new orders. Looking ahead to September, a preliminary reading from IHS Markit showed its factory gauge rising to the highest level since January 2019.
Shipments of core capital goods increased 1.5 per cent in August from the prior month, also exceeding forecasts, after a 2.8 per cent gain.
At the same time, orders for motor vehicles and parts fell four per cent after a 21.7 per cent jump in July and an 85.4 per cent surge in June. Excluding transportation, durable goods orders climbed 0.4 per cent in August, less than expected.
As the pandemic stretches on, the airline industry remains extremely depressed. Orders for civilian aircraft and parts were negative, continuing to reflect ongoing cancellations. U.S. planemaker Boeing Co. reported eight orders in August, up from none in July, but the company has received hundreds of cancellations this year weighing on total factory output.