Washington (AFP) - US durable good orders in June continued their recovery from the COVID-19 hit, with new orders rising 7.3 percent on demand for transportation equipment, the Commerce Department said Monday.
The $206.9 billion in business done last month followed a surge in new orders in May by a downwardly revised 15.1 percent, after the Detroit automakers and plane maker Boeing restarted production.
As in May, the better-than-expected growth in demand for manufactured goods after coronavirus-driven plunges in March and April was fueled by transportation orders, which grew 20 percent or $9.2 billion.
Motor vehicles and parts formed the backbone of the growth, with new orders up 85.7 percent and shipments growing 83.1 percent.
However in a sign of Boeing's continued struggles, new orders for non-defense aircraft slumped -462.3 percent as customers canceled orders with the plane maker.
Excluding transport, new orders rose 3.3 percent, in line with analysts' forecasts.
Ian Shepherdson of Pantheon Macroeconomics said he expected a bigger increase in that metric, but said it had otherwise recovered faster than its slump during the global financial crisis in 2008.
"The bulk of the (second quarter) GDP hit was in consumption, not capex, and the speed of the recovery ultimately is much more dependent on consumers too," he said, using an acronym for capital expenditures.
However, Oxford Economics warned that the data indicated a manufacturing sector still weak from the COVID-19 downturn earlier this year.
New orders are down around 16 percent and shipments about eight percent from February, they said.
"The sugar rush from re-openings has now faded and a resurgence of domestic coronavirus cases, alongside very weak demand, supply chain disruptions, historically low oil prices and high levels of uncertainty will weigh heavily on business investment," Oxford said.
