Orders for long-lasting goods surged in July on strong demand for civilian aircraft, the government said Friday, but bookings weakened in many other sectors.
Manufacturers' orders for goods designed to last at least three years rose 4.2 percent to a seasonally adjusted $230.7 billion, the Commerce Department said. The increase was bigger than the 2.4 percent rise economists surveyed by Thomson Reuters had expected.
Bookings for transportation equipment, a particularly volatile category, shot up 14.1 percent in July, buoyed by a 53.9 percent jump in demand for civilian aircraft. Boeing Co. (NYSE: BA) received its biggest batch of orders since last December. The company said it received orders for 260 aircraft, up from 24 planes in June.
Non-defense capital goods orders excluding aircraft, a key barometer of capital spending by businesses, declined 3.4 percent after falling 2.7 percent in June. Economists had expected this category to rise 0.7 percent after a previously reported 1.7 percent decline in June.
Friday's report showed unfilled orders, a sign of future demand, rose 0.8 percent last month after climbing 0.4 percent in June.
Shipments of durable goods in July, up seven of the last eight months, increased $5.9 billion or 2.6 percent to $231.1 billion. Inventories rose $2.7 billion or 0.7 percent to $369.3 billion.
"This is a very weak report," Paul Ashworth, chief economist at Capital Economics, wrote in a note to clients. "Ignore the headline jump, the slump in capital goods orders will only strengthen the Fed's resolve to act soon."