Durable goods orders drop in July

Durable goods are those products that are expected to last three years or more.
Spencer Platt/Getty Images
Durable goods are those products that are expected to last three years or more.

WASHINGTON — Orders for long-lasting US factory goods fell sharply last month as demand for commercial aircraft plummeted and businesses spent less on computers and electrical equipment.

Manufacturing continues to struggle and could prevent economic growth from picking up in the July-September quarter.

Orders for durable goods plunged 7.3 percent in July, the Commerce Department said Monday — the steepest drop in nearly a year. Excluding the volatile transportation category, orders fell just 0.6 percent. Both declines followed three straight months of increases.


Economists tend to focus on orders for so-called core capital goods. Those orders fell 3.3 percent, but the drop followed four straight months of gains.

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Core capital goods are considered a good measure of businesses’ confidence in the economy. They include items that point to expansion while excluding volatile orders for aircraft and defense.

The big drop suggests the third quarter is off to a weaker start than some had hoped. While economists cautioned that it’s just one month of data, a few lowered their growth estimates for the July-September quarter.

One bright spot: Unfilled orders rose to their highest level since record keeping began in 1992. Those are orders placed in previous months that have yet to be shipped. The increase suggests output could remain steady in coming months, despite the weak month of orders in July.