Durable goods orders surged 22.6% in July, associated with a massive increase in aircraft orders.
The report showed that transportation orders were up 74.2%, but excluding transportation, new orders decreased 0.8%, though this compares with a revised June number that showed orders ex-transport rose 3% instead of a previously reported 0.8%.
Excluding defence, new orders were up 24.9% in July, and non-defence capital goods orders excluding aircraft fell 0.5% in July.
This is the largest increase in the headline reading for durable orders ever, topping the previous record of a 16.6% increase in June 2000.
Following the report, Ian Shepherdson at Pantheon Macro said: “In one line: Headline is wild, details more encouraging than -0.8% ex-transport number suggests.”
Expectations were for orders to increase 8% in July.
Paul Dales said the 1.5% increase in non-transport, non-defence capital goods orders suggested that business investment in equipment was “on course to rise rapidly in the third quarter.”
There was a massive range of expectations for this report, with some economists expecting this to push the headline increase in durable goods orders as high as 30%.
The June durable goods report was also revised up to a 2.7% increase from a previous reading of 0.7%.
Bloomberg Economist Michael McDonough tweeted the following chart, which shows the massive rise in orders.
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