US durable goods orders rebound in June
A closely watched gauge of manufacturing activity bounced back in June, with its strongest increase since last summer.
Orders for durable goods — those meant to last three years or more, including cars, home appliances and aircraft — jumped 2 per cent in June to $246bn, driven by an increase in transportation equipment, the US Department of Commerce said on Thursday.
This marked a recovery from May’s downwardly revised 2.3 per cent decline (previously a 1.3 per cent drop) and also soared past the median forecast among economists for a 0.9 per cent increase.
Drops in both April and May this year represented the first back-to-back declines in a year and stirred concerns in the market the US economy may be losing momentum and might prompt an interest-rate cut from the Federal Reserve.
While an interest-rate cut from the Fed at its policy meeting later this month is seen as highly likely, recent data on the US economy have been a bit more encouraging, namely very strong June non-farm payrolls.
Excluding transport purchases, which can often be volatile, new orders for durable goods were up 1.2 per cent, from a revised 0.5 per cent rise in May, and 1 percentage point ahead of Wall Street forecasts. Excluding defence spending, new orders rose 3.1 per cent after a 1.2 per cent drop the previous month.